The Nigeria Labour Congress, NLC, over the weekend in Washington, DC, United States, told the International Monetary Fund, IMF, and World Bank, WB, to stop lending money to governments not accountable to their citizens.
According to the NLC, “Such loans only deepen the crisis of governance and push nations further into the abyss of debt and underdevelopment.”
Joe Ajaero, President of the NLC, also informed the global financial institutions that their economic prescriptions throughout the years had continued to deepen poverty and impede Nigeria’s progress.
Ajaero, speaking at the 2025 high-level meeting of the global labor movement, the IMF, and the World Bank at the World Bank office in Washington, pleaded with the Bretton Woods institutions to stop imposing blanket austerity measures and instead assist developing countries in developing progressive tax policies that protect the poor and vulnerable.
In a presentation titled “Progressive Taxation and Fiscal Consolidation,” Ajaero told his audience, “We represent the voice of those who are marginalized and those who are supposed to benefit from taxation but who have unfortunately in many countries begun to suffer adversely from taxation.
“Progressive taxation and fiscal consolidation are not merely an economic issue; they are a moral imperative and a key question of social justice.
“The current global economic order, influenced heavily by institutions such as the IMF and World Bank, often perpetuates inequality rather than addressing it. In many developing nations, including Nigeria, tax policies are regressive, placing a disproportionate burden on the poor while allowing the wealthy and multinational corporations to evade their fair share.’ This is not an accident; it is a systemic failure that demands urgent correction. The IMF and World Bank have, for decades, prescribed austerity measures and structural adjustment programs that prioritize debt servicing over human development.
“These policies have eroded public services, weakened labor rights, and deepened poverty. Yet, the question we must ask is: Why do these institutions continue to lend to profligate and dictatorial governments that are unaccountable to their citizens? Is it a deliberate strategy to push nations like Nigeria further into a cycle of debt and underdevelopment?
“The fiscal challenges on developing nations as a result of debt pressures and IMF and WB prescriptions have compelled them to seek avenues to remain fiscally solvent. Thus, all manner of taxes are placed on workers and the poor who do not have means of evading such taxes.
“Nigeria, in its proposed tax bills, plans to impose taxes on people who earn just N800,000 per annum or $500 (five hundred US dollars per annum). If that is not a regressive tax proposal, nothing else will.
“Lending to governments that do not prioritize the welfare of their people is not development; it is exploitation. It entrenches corruption, fuels inequality, and undermines democracy. The workers and citizens of these nations are left to bear the brunt of these policies, while the elite and their foreign enablers profit.
“IMF and WB must fashion a way to stop mortgaging the future of these nations by its continued lending to such regimes.
“We call on the IMF and World Bank to rethink their approach. Instead of imposing blanket austerity measures, the IMF and WB must support developing nations in crafting progressive tax policies that protect the poor and vulnerable.
“Thus, the IMF and WB should support inclusive tax systems. In other words, the conceptualization and implementation of tax systems must allow the participation of key national stakeholders, especially workers who constitute the bulk of taxpayers in developing economies.
“Whether a tax is regressive or progressive begins at the table where it was conceived. Any group that is not at the table is on the menu. The new proposed tax bills in Nigeria are not inclusive; despite our loud cries at the formation of the tax committee, the government denied workers’ representation; thus, its passage into law has become stymied.
“IMF and WB must, therefore, encourage nations to allow for the participation of all critical stakeholders in all the processes from the conceptualization to the operationalization of their tax systems. The use of social dialogue must, therefore, be prioritized.
“IMF and WB must tax wealth and not poverty. They should implement higher taxes on luxury goods, capital gains, and the incomes of the ultra-wealthy. Tax justice is at the heart of social justice and global sustainability.
“So, the IMF and WB should be at the forefront of co-creating a just and equitable world. You cannot talk of progressive tax when you increase taxes on food, energy, electricity, telecommunications, street traders, artisans, and informal economy workers, all in the guise of formalization of the informal economy.
“The IMF and WB should close loopholes by ensuring multinational corporations pay their fair share of taxes in the countries where they operate. These institutions should invest in social protection by using tax revenues to fund education, healthcare, and social safety nets that uplift the most vulnerable.
“Fiscal consolidation must not come at the expense of the poor. It must be rooted in equity and justice. The IMF and World Bank have a moral obligation to ensure that their policies do not exacerbate inequality or undermine the sovereignty of nations.
“Reduction of social inequality must drive policy prescriptions and not social mobility. The IMF and WB should advocate and support the proposed UN Convention on Tax, which was initiated in late 2022 to, among other things, take care of taxing digital organizations’ profits made in countries other than where they are physically located and to include all countries of the world in generating global tax frameworks.
“I urge these institutions to stop lending to governments that are unaccountable to their people. Such loans only deepen the crisis of governance and push nations further into the abyss of debt and underdevelopment.
“Instead, the IMF and World Bank must prioritize transparency, accountability, and the protection of workers’ rights. The path to sustainable development is not through debt traps and regressive tax policies.
“It is through empowering nations to build equitable tax systems that serve the many, not the few. The time for change is now.”
