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Suffering Nigeria Could Lead Economic Reform: Toward LaRouche's ‘Trade Without Currencies’

April 7, 2024 (EIRNS)—Since his inauguration in May 2023, Nigerian President Bola Tinubu has implemented the Western/ IMF program with a verve perhaps only topped by that of Argentinian President Javier Milei. After Tinubu canceled former President Muhammadu Buhari’s fuel subsidies and “artificial” support of the naira currency, Tinubu then dealt with the resulting 30% inflation thus unleashed by jacking up interest rates to an obscene 28%, all in conformance with reigning IMF monetary theory.

This and other “progress” of the Tinubu Administration was duly noted in a March 4 report by the IMF, released after a team visited the country in mid-February. Yet, despite the fact that hunger has returned to the streets of Africa’s most populous country, the report noted a few areas of lingering concern. Fuel and electricity prices were still “below cost recovery,” it said, which, if left unrectified “could have a fiscal cost of up to 3% of GDP in 2024.”

On April 1, the Tinubu Administration announced an astounding 230% increase in the price of electricity for 15% of the country, those fortunate enough to have electricity 20-24 hours per day. Yet, despite its criminal monetarism and the wishes of what is unfortunately still referred to as the “Bretton Woods institution” (IMF) in Africa, petroleum prices in Nigeria suddenly fell last week, a trend which is likely to continue in the following weeks.

Hardly an oversight of the monetarist ghouls, this was one of defiance. On Dec. 8, 2023, the country’s (and continent’s) largest oil refinery came into service and, after building up a reserve of some 6 million barrels of crude oil during the next months, the Dangote Petroleum Refinery finally released its first batch of fuel to the domestic market on Tuesday, April 2. Prices for “Automotive Gas Oil” (diesel) fuel fuel approximately 20% on April 5, going from N1,700/liter to N1,350/liter. Additional reductions in price are expected in the coming weeks, as the refinery begins to market Premium Motor Spirit (gasoline), and aviation fuel (kerosene). Just as importantly, Aliko Dangote—owner/financer of the refinery, aka “Africa’s richest man”—had earlier committed to conducting the auctions for his fuel in the local naira currency, and not in dollars.

Designed with a nameplate capacity of 650,000 barrels per day, the huge refinery could satisfy Nigeria’s domestic needs (currently estimated at 350,000 bpd, but due to grow) and have plenty to export for regional markets. Just as importantly, Dangote’s refinery may soon become the chosen destination of other continental oil exporters, greatly enhancing “Global South-Global South” trade. Perhaps it was just this threat which convinced multinationals such as ExxonMobil and Royal Dutch Shell to actually sell to Dangote, after some hesitation. On Dec. 29, 2023, the Nigerian Upstream Petroleum Regulatory Commission released a statement requiring oil producers licensed in Nigeria to provide a minimum of 483,000 bpd to the domestic market, an additional act of defiance quickly noted by Reuters.

All of this conforms with what Lyndon LaRouche described in a July 18, 2000 paper, “On a Basket of Hard Commodities: Trade Without Currency.” The goal, as LaRouche described it, was to eliminate the primacy of the IMF as a global monetary supervisory body. Describing the institution as “entirely bankrupt,” even 24 years ago, LaRouche argued that not only did the monetary institution have to go, but the currencies themselves as measures of trade and value had to be eliminated. Only in such a way could the chances of outside forces manipulating the agreed-upon hard-commodity reference be minimized. Whether consciously or not, Dangote’s recent actions (along with Buhari’s ahead of him) completely conform to that outlook.

The Dangote Refinery was originally conceived in 2013, but it was not until 2016, after Muhammadu Buhari became President (in 2015) that the project began to take shape. It was Buhari who convinced like-minded nationalist Dangote (who made his fortune in concrete and sugar production) to privately finance the construction, with $20 billion of his own money, thus sidestepping all outside monetarist interference. In 2022, Dangote had also opened a fertilizer plant, one likewise capable of producing the country’s entire domestic needs. The eventual commissioning (upon completion) of the refinery was one of Buhari’s final acts in office, in May 2023.