IMF policy advice extending the value-added tax (VAT) to the already unpopular
soaring fuel prices in Nigeria has infuriated virtually every Nigerian that has a voice.
A cross section of citizens polled over the issue also consider the Fund’s request
that Nigeria’s authorities should re-introduce the suspended excise duty on
telecoms operators as “meddlesome” and “unwelcome” .
Fund’s twin, the World Bank, was also sharply rebuffed by when it asked government
to restart the rested fuel import binge to “promote competition” against the highly
successful Nigerian private refinery, Dangote Petroleum Company. The Bank quickly
retracted the odious recommendation from its website when the company protested,
accusing it of hypocrisy for not pushing such policies to Western countries that
plainly shut out foreign competition as their tariffs and other protectionist policies do.
Remarkably however, Nigeria’s Authorities, through the Ministry of Finance, has
assured citizens that the government has no intention of raising additional taxes to
those captured in its latest national tax policies and regime. The Ministry says
such international multilateral institutions’ recommendations are not binding on
member countries. Apparently, the fiscal authorities are cued on to the popular
feelings of a broad swathe of economic agents in the country.
A former boss of the Nigerian Manufacturers association and now of Centre for the
Promotion of Private Enterprise, Muda Lawal, was one of the first citizens to
lambaste the policy recommendations on the grounds that they would worsen food
and cost of living crisis already ravaging Nigerian families and homes. Like several
other local economists and experts, he warned that the measures would certainly
skyrocket already high transportation, logistics and food prices.
Moreover, he worried that the policies were bound to cause economic contraction as
consumers’ purchasing power gets eroded. The unwanted outcome would be a
weakening of productivity and small and medium businesses, making nonsense of
government’s larger economic objectives .