Both the World Trade Organization (WTO) and the International Monetary Fund (IMF) keep a close eye on and evaluate the economic trends and policies of their members.
The IMF wants to make sure that nations are managing their economies and finances effectively to avoid internal financial instability, which may spread to other countries like a virus.
WTO’s goal is to ensure that none of its members engage in beggar-thy-neighbor or dictatorial trade practices that could disrupt the global economy by hurting their own and other members’ economies.
Autocratic measures like the protectionist Smoot-Hawley Tariff Act of 1930 in the United States, for example, contributed to the Great Depression and the outbreak of World War II.
TPR and Article IV Consultation Reports
The IMF therefore carries out what is known as Article IV Consultations with each of its members annually in accordance with Article IV of its Articles of Agreement, examining their economic policies and practices, pointing out their advantages and disadvantages, and making policy recommendations.
Likewise, the WTO conducts a Trade Policy Review, or TPR, of every member state to make sure that their trade policies align with WTO regulations.
Nigeria’s 2024 TPR and Article IV Consultation reports by the IMF and ITO commended the economic reforms implemented by the Bola Tinubu administration, particularly the elimination of fuel subsidies and the floating of the naira.
The IMF described those reforms as “crucial to boost investor confidence, unlock Nigeria’s growth potential and diversify the economy.”
However, the WTO and IMF agreed that Tinubu’s reforms had negative effects, particularly with increasing inflation, sharp naira devaluations, and severe food insecurity and hunger that exacerbated societal tensions. The negative consequences were attributed to “persistent loose financial conditions” and the failure to appropriately sequence the reforms and to offer effective mitigation, such as real safety nets.
“Truth is, whatever reforms Tinubu introduces, unless he frontally tackles corruption, Nigeria will continue to suffer untold reputational damage internationally and foreign investors won’t beat a path to the door of a country known for entrenched corruption.”
Corruption As The Bane of Nigeria’s Economy
The WTO and IMF made insightful comments regarding the existential threats to Nigeria’s economy posed by widespread corruption and the absence of the rule of law.
According to the World Trade Organization, “Corruption and lax rule of law enforcement continue to be major obstacles to private sector-led growth in Nigeria.”
According to studies cited by the IMF, “bringing Nigeria’s level of corruption down to that of South Africa or other benchmark countries (for example, Malaysia and Mongolia) could increase the amount of infrastructure obtained from each publicly invested dollar by 12 percent.”
“I Deserve Guinness Award”
9am News Nigeria recounts President Tinubu’s remarks at the 10th German-Nigerian Business Forum in November last year. The president said: “To me, if you didn’t mention me in the Guinness Book of Records, I would find a way to insert myself because I did the economic reforms without expectations.”
Reacting to the President’s remarks, financial analyst Olu Fasan lamented the president’s economic policies saying “when, as president, your policies inflict untold suffering and misery on millions of citizens, it’s utterly arrogant and insensitive to beat your chest and demand global accolades for your ‘achievement’.”
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