IMF Forces African Nations to Remove Fuel Subsidies

[emezico]

Joining Guinea, Cameroon, Ghana and Chad, Nigeria on New Years day removed fuel subsidies in accordance with an order from the IMF (International Monetary Fund). This created a jump in the price of automobile fuel from about 55 Naira per liter to 140Naira per liter overnight, Sunday. This brings fuel/gas prices in Nigeria to about the same price it is in the US, though lower than many European nations.

Nigerians used to pay about $1.51 / gallon, the European average is about $5-6.00/gallon, while the US average is $3-3.70/gallon. While other oil producing nations, like Venezuela, Kuwait and Saudi Arabia are about $0.12, $0.78 and $0.91 respectively. This hike in fuel prices was compelled on African Nations by the IMF due to supposedly rising global oil prices and the Europe recession.

Trying to invoke an "African Spring?"
The Managing Director of the International Monetary Fund (IMF), Christine Lagarde visited Nigeria to meet with the President, Goodluck Johnathan in December 2011 to drive home this directive. This move invites frustration on African nations which comparatively escaped the "Greed" Wall street recession that has been marauding and collapsing European and Middle Eastern economies, with resulting hardship, riots and Government change, including the popular "occupy" riots still plaguing the United States and other European nations, the August 2011 "Robin-hood" riots of the UK,  the collapse of Greece economy, that likewise affected the Middle East with the "Arab Spring" revolutions.

The meeting with Goodluck Johnathan was not just coincidental. Analysts believe it was predetermined. The IMF has been canvassing for the removal of subsidy among African countries.

This pronouncement has seen governments in Nigeria, Guinea, Cameroon, Chad and Ghana moving to cut state subsidies on fuel.
Yesterday, Ghana cut subsidy and it was learned that the development was due to pressure from the IMF to do so because of rise in the price of crude.

The Chief Executive Officer of Ghana's National Petroleum Authority (NPA), Alex Mould said the cumulative effect of the rise in crude oil prices this year and the about 5.7 percent depreciation of the cedi meant a 25 percent increase in cedi terms in the cost of procuring crude oil and petroleum products since January.

For instance, the IMF has urged countries across West and Central Africa to cut fuel subsidies, which they say are not effective in directly aiding the poor, but do promote corruption and smuggling.

The price change will see the cost of Liquefied Petroleum Gas (LPG) increase by 30 percent while petrol and diesel will go up 15 percent at pumps in Ghana.

Mould said Ghana has spent about 450 million cedis on fuel subsidies in 2011.

Ghana's Minister for Finance Kwabena Duffour said the removal of subsidies would have a positive impact on Ghana's economy.

Duffour said: "Subsidising fuel is not sustainable. It is the right thing to do so we can sustain our fiscal consolidation."

This is the same music that the protagonists of subsidy removal in Nigeria, like the Coordinating Minister of Economy and Minister of Finance, Ngozi Okonjo-Iweala; the Minister of Petroleum, Diezani Alison-Madueke and the Governor of Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi are singing.

While Sanusi insisted that the economy would breakdown if the subsidy is not removed, Ngozi said Nigerians would be better off without subsidy.

Ghana's subsidy removal yesterday confirmed people's speculations that Western powers are behind the move to stop subsidy. Development in Ghana has also gone to confirm that the Nigerian government would boycott the public outcry on subsidy removal and go ahead to remove.

There is no provision for subsidy in the 2012 budget proposal submitted by President Goodluck Jonathan.


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[emezico]