On October 14, 2024, during the 30th Nigerian Economic Summit in Abuja, Indermit Gill, Senior Vice President and Chief Economist of the World Bank, declared that Nigeria would need to continue its painful economic “reforms” for another 10 to 15 years to achieve transformation.
These reforms—removal of fuel subsidies, currency devaluation, and interest rate hikes—echo the policies the IMF and World Bank have long imposed on developing nations. For many Nigerians, these policies have brought little more than poverty, inflation, and economic despair.
Gill’s remarks highlight a broader truth: the IMF and World Bank, key institutions of the Bretton Woods system, have been instrumental in maintaining a form of economic imperialism in Africa, ensuring that the continent remains tied to foreign interests and unable to break free from cycles of debt and dependency. Nigeria’s experience under these institutions has been a tale of austerity, stagnation, and hardship. However, there is an emerging alternative—one that offers hope for a more democratic and just path to development: the BRICS Development Bank.
The Bretton Woods Legacy in Africa: A History of Failure
To grasp the full weight of Nigeria’s economic struggles, we must look back to the 1980s when the IMF and World Bank introduced Structural Adjustment Programs (SAPs) across Africa. These programs, presented as solutions to debt crises, prescribed a set of neoliberal reforms: devaluation of local currencies, removal of subsidies, privatisation of state assets, and severe cuts in public spending. Nigeria, like many African nations, followed this path, hoping to stabilise its economy.
The results were disastrous. In Nigeria, the currency devaluation that was supposed to boost exports led instead to inflation, with the prices of imported goods skyrocketing. The removal of subsidies—especially on fuel—triggered widespread economic hardship, with essential goods becoming unaffordable for millions of people. Privatisation of state enterprises and public spending cuts led to massive unemployment and deteriorated infrastructure. Rather than achieving financial independence, Nigeria sank deeper into debt and poverty.
This pattern of failure is not unique to Nigeria. In Zambia, SAPs gutted the economy in the 1980s and 1990s, leading to widespread poverty and social unrest. Ghana, too, suffered under IMF-imposed austerity, with inflation skyrocketing and public services crumbling. Across the continent, these policies have led to weakened economies, disempowered governments, and deepened inequality.
Economic Imperialism Disguised as Reform
The problem with IMF and World Bank policies is not merely that they have failed—it is that they are designed to serve foreign creditors, not the local populations of the countries they are imposed upon. These institutions prioritise the repayment of debts to wealthy nations over the development needs of the countries they claim to help. In this way, they perpetuate a form of economic imperialism, where African nations remain dependent on foreign loans, locked into cycles of austerity that serve external interests.
In Nigeria, the removal of fuel subsidies has been a particularly painful example of this. Fuel is the lifeblood of the Nigerian economy, and when subsidies are removed, the cost of transportation, food, and basic goods soars. The IMF has repeatedly insisted that removing these subsidies is essential for economic reform, yet each time this policy is implemented, the result is widespread suffering. Meanwhile, foreign creditors, whose interests these policies ultimately serve, continue to profit.
BRICS: A New Model for Development
As Nigeria faces yet another round of IMF and World Bank-imposed austerity, many are questioning whether it is time to seek alternatives. One promising option lies in closer engagement with the BRICS nations—Brazil, Russia, India, China, and South Africa. These countries, through the BRICS Development Bank (officially the New Development Bank, or NDB), offer a radically different approach to economic partnership, one that emphasises development over austerity.
Unlike the IMF and World Bank, which prioritise debt repayment and impose harsh conditions on borrowing countries, the BRICS Development Bank operates on more democratic principles. Each BRICS member has an equal share in the bank, and its lending policies are designed to reflect the needs and priorities of developing countries. For Nigeria, this means that loans from the NDB would not come with the same punitive conditions—no forced currency devaluation, no demand for the removal of essential subsidies, and no requirement to slash public spending.
Moreover, the BRICS Development Bank is focused on infrastructure and sustainable development, areas that are critical for long-term economic growth. While the IMF and World Bank push austerity measures that cut social services and reduce government investment, the NDB’s approach is to support projects that build capacity, create jobs, and enhance industrialisation. This aligns more closely with the needs of countries like Nigeria, which requires investments in infrastructure, energy, and technology to achieve sustainable development.
A More Democratic Approach to Global Finance
One of the most significant differences between the IMF/World Bank and the BRICS Development Bank is the governance structure. The Bretton Woods institutions are dominated by Western countries, particularly the United States and European Union, which hold the largest voting shares. This has led to policies that often reflect the interests of wealthy nations at the expense of developing countries. The BRICS Development Bank, by contrast, operates on a more democratic basis, with equal representation from its member nations, ensuring that decisions are made with the interests of the Global South in mind.
For Nigeria, this means the potential for a more equitable and respectful partnership—one that is not built on coercion or dependency. The NDB’s focus on infrastructure development and sustainability offers Nigeria the opportunity to invest in its future without being subjected to the crippling conditions that come with IMF and World Bank loans.
Why Nigeria Should Embrace BRICS
Nigeria’s continued reliance on the IMF and World Bank has led to decades of economic stagnation, poverty, and social unrest. The same failed policies are being pushed today under the guise of “reform,” but the results will likely be no different from the economic ruin of the past. It is time for Nigeria to break free from this cycle of dependency and embrace alternatives that prioritise the well-being of its people.
By strengthening ties with the BRICS nations and engaging with the BRICS Development Bank, Nigeria can pursue a more balanced approach to economic development—one that emphasises industrial growth, infrastructure investment, and sustainable development. Instead of being beholden to Western-dominated institutions that prioritise debt repayment over development, Nigeria can partner with countries that understand the unique challenges facing developing economies and offer solutions that are tailored to their needs.
Conclusion: A New Vision for Nigeria’s Economic Future
For decades, the IMF and World Bank have dictated Nigeria’s economic path, and the results have been devastating. These institutions have imposed policies that deepen poverty, exacerbate inequality, and keep Nigeria dependent on foreign loans. As the country faces yet another round of painful austerity, it is clear that this path will not lead to the promised transformation.
The BRICS Development Bank offers a viable and more democratic alternative—a model that emphasises partnership, infrastructure development, and economic sovereignty. By embracing this alternative, Nigeria can break free from the grip of economic imperialism and chart a new course for its future—one where the interests of its people come first, and where economic policies serve to uplift rather than oppress.
The time has come for Nigeria to rethink its relationship with the IMF and World Bank and explore new partnerships that can help build a sustainable, prosperous, and sovereign future. The BRICS Development Bank could be the key to unlocking that future.
–Gbenga Aborowa
Gbenga is a journalist based in Lagos , Nigeria and a staunch Pan Africanist
