NLC Calls on the World Bank and IMF to Cease Lending to the Nigerian Government, Calling its Leaders "Unaccountable."

The Nigeria Labour Congress (NLC) recently addressed the International Monetary Fund (IMF) and the World Bank (WB) in Washington, D.C., urging them to cease lending to governments that lack accountability to their citizens. The NLC asserted that such financial assistance exacerbates governance crises and drives nations deeper into debt and underdevelopment. Joe Ajaero, the President of the NLC, articulated these concerns, highlighting how the economic strategies proposed by these global financial institutions have consistently intensified poverty and hindered Nigeria's progress. Speaking at the 2025 high-level meeting of the global labour movement, the IMF, and the WB at the World Bank office, Ajaero appealed to the Bretton Woods institutions to refrain from enforcing blanket austerity measures. Instead, he called for support in developing progressive tax policies that safeguard the interests of the poor and vulnerable populations. In his presentation titled “Progressive Taxation and Fiscal Consolidation,” Ajaero emphasized, “We represent the marginalized voices of those who should benefit from taxation but are, in many instances, adversely affected by it.” He further stated, “Progressive taxation and fiscal consolidation transcend mere economic considerations; they embody a moral obligation and a fundamental issue of social justice.” Ajaero criticized the prevailing global economic framework, heavily influenced by the IMF and World Bank, for perpetuating inequality rather than alleviating it. He noted that in numerous developing countries, including Nigeria, tax systems are regressive, imposing an unfair burden on the impoverished while enabling the affluent and multinational corporations to avoid their equitable contributions. He concluded that this situation is not coincidental but rather a systemic failure that necessitates immediate rectification. For decades, the IMF and World Bank have advocated austerity measures and structural adjustment programs that prioritize debt repayment over human development. These policies have diminished public services, undermined labor rights, and exacerbated poverty. However, we must inquire: Why do these institutions persist in lending to extravagant and authoritarian governments that lack accountability to their citizens? Is this a calculated strategy to further entrench nations like Nigeria in a cycle of debt and underdevelopment? The fiscal difficulties faced by developing countries, stemming from debt pressures and the prescriptions of the IMF and World Bank, have forced them to explore ways to maintain fiscal stability. Consequently, various taxes are levied on workers and the impoverished, who have no means to evade such financial burdens. In its proposed tax legislation, Nigeria intends to impose taxes on individuals earning merely N800,000 annually, equivalent to approximately $500. This proposal exemplifies a regressive tax system. Lending to governments that neglect the welfare of their citizens cannot be considered development; rather, it constitutes exploitation. Such practices perpetuate corruption, exacerbate inequality, and weaken democratic structures. The burden of these policies falls disproportionately on the workers and citizens of these nations, while the elite and their foreign partners reap the benefits. The IMF and World Bank must devise strategies to cease compromising the future of these nations through continued lending to such regimes. We urge the IMF and World Bank to reassess their methodologies. Rather than enforcing sweeping austerity measures, these institutions should assist developing nations in formulating progressive tax policies that safeguard the interests of the poor and vulnerable. Therefore, the IMF and World Bank should advocate for inclusive tax systems. This entails that the design and implementation of tax frameworks must involve the participation of essential national stakeholders, particularly workers, who represent the majority of taxpayers in developing economies. The classification of a tax as regressive or progressive is determined at the initial stages of its development. Any group excluded from this process risks becoming marginalized. The recently proposed tax legislation in Nigeria lacks inclusivity; despite widespread calls for the inclusion of workers during the establishment of the tax committee, the government has opted to exclude their representation, resulting in significant delays in the law's enactment. The International Monetary Fund (IMF) and the World Bank (WB) must advocate for the involvement of all essential stakeholders throughout the entire process, from the initial concept to the implementation of tax systems. Prioritizing social dialogue is crucial in this regard. The IMF and WB should focus on taxing wealth rather than poverty. This entails imposing higher taxes on luxury items, capital gains, and the earnings of the extremely wealthy. Tax justice is fundamentally linked to social justice and global sustainability. Consequently, the IMF and WB should lead efforts to create a fair and equitable world. It is contradictory to promote progressive taxation while simultaneously increasing taxes on basic necessities such as food, energy, electricity, telecommunications, and the informal sector, all under the pretext of formalizing the informal economy. Furthermore, the IMF and WB should address tax loopholes to ensure that multinational corporations contribute their fair share of taxes in the countries where they operate. These organizations should also allocate tax revenues to enhance social protection, funding education, healthcare, and social safety nets that support the most vulnerable populations. Fiscal consolidation should not come at the expense of the impoverished; it must be founded on principles of equity and justice. The IMF and World Bank bear a moral responsibility to ensure that their policies do not worsen inequality or infringe upon the sovereignty of nations. The focus of policy initiatives should be on the reduction of social inequality rather than solely on social mobility. The International Monetary Fund (IMF) and the World Bank (WB) ought to endorse and support the United Nations Convention on Tax, which was proposed in late 2022. This initiative aims to address the taxation of digital companies' profits generated in jurisdictions different from their physical locations and to ensure that all nations participate in the establishment of global tax frameworks. I call upon these institutions to cease lending to governments that lack accountability to their citizens. Such financial assistance exacerbates governance crises and drives countries deeper into debt and underdevelopment. Instead, the IMF and World Bank should emphasize transparency, accountability, and the safeguarding of workers' rights. Sustainable development cannot be achieved through debt traps and regressive tax measures. The solution lies in empowering nations to create fair tax systems that benefit the majority rather than a privileged few. The moment for transformation is upon us.