The Nigerian Labour Congress (NLC) told The International Monetary Fund (IMF) and World Bank (WB) to cease providing loans to governments that are not answerable to their constituents. According to the NLC, “such loans only deepen the crisis of governance and push nations further into the abyss of debt and underdevelopment.” In addition to saying this, NLC President Joe Ajaero explained to the international financial institutions how their economic recommendations throughout the years have exacerbated poverty and hampered Nigeria’s progress.
Speaking at the World Bank office in Washington for the 2025 high-level meeting of the global labour movement, the IMF, and the WB, Ajaero begged the Brettonwoods institutions to refrain from enforcing strict austerity measures and instead assist developing countries in creating progressive tax laws that safeguard the weak and impoverished. In his talk titled “Progressive Taxation and Fiscal Consolidation,” Ajaero stated to the audience: “We represent the voice of those who are marginalised and those who are supposed to benefit from taxation but who have unfortunately in many countries begun to suffer adversely from taxation.” Fiscal consolidation and progressive taxation are not just economic concerns; they are also moral obligations and important social justice issues.
“Instead of addressing inequality, the existing global economic order, which is greatly influenced by organisations like the World Bank and IMF, frequently makes it worse. Tax laws in many developing countries, such as Nigeria, are regressive, burdening the poor disproportionately while enabling the rich and large enterprises to avoid paying their fair amount. This is a systemic failing that needs to be fixed immediately; it is not an accident. For many years, the World Bank and IMF have recommended structural adjustment plans and austerity measures that put debt repayment before of human development.
“These policies have made poverty worse, undermined labour rights, and damaged public services. However, we must ask why these institutions keep funding autocratic and wasteful regimes that are not answerable to their constituents. Is it a purposeful tactic to further entrench countries like Nigeria in a debt and underdevelopment cycle?
“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 U$500 (five hundred US Dollars per annum). If that is not a regressive tax proposal, nothing else will.
“Lending to governments that do not prioritise 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 urge the World Bank and IMF to reconsider their strategy. The IMF and WB should assist developing countries in creating progressive tax laws that safeguard the weak and impoverished rather than enforcing strict austerity measures. Therefore, inclusive tax systems should be supported by the IMF and WB. Stated differently, the design and execution of tax systems must permit the involvement of important national stakeholders, particularly workers, who make up the majority of taxpayers in emerging nations. The table where a tax was conceived determines whether it is progressive or regressive.
The menu includes any party not seated at the table. Despite our loud protests during the tax committee’s establishment, the administration refused to include workers’ representation in the new proposed tax laws in Nigeria, which is why their passage into law has been blocked. Therefore, the IMF and WB must urge countries to permit all important stakeholders to participate in all stages of the development of their tax systems, from conception to implementation. Therefore, it is imperative to prioritise the use of social discussion. Wealth, not poverty, should be taxed by the IMF and WB. The ultra-wealthy’s income, capital gains, and luxury products should all be subject to higher taxes. Global sustainability and social justice are inextricably linked to tax justice.
Therefore, the IMF and WB ought to lead the charge in jointly establishing a world that is fair and just. When you raise taxes on food, energy, power, telecommunications, street vendors, craftspeople, and workers in the unorganised sector under the pretence of formalising the sector, you cannot claim to be implementing progressive taxation. By making sure multinational firms pay their fair share of taxes in the nations where they conduct business, the IMF and WB should tighten loopholes. By employing tax dollars to support healthcare, education, and social safety nets that support the most disadvantaged, these organisations should make investments in social protection.
“Policy recommendations must be based on reducing social inequality rather than social mobility. In order to, among other things, tax the profits of digital organisations made in nations other than their physical locations and to involve all nations in the creation of global tax frameworks, the IMF and WB should promote and support the proposed UN Convention on Taxation, which was started in late 2022. “I implore these organisations to cease making loans to governments that are not answerable to their constituents. These loans merely serve to worsen the governance issue and drive countries farther into debt and underdevelopment.
Transparency, accountability, and the defence of workers’ rights must be given top priority by the IMF and World Bank instead. Regressive taxation and debt traps are not the way to sustainable development. It is by giving countries the authority to create fair tax structures that benefit everyone, not just a select few. Now is the moment for change.