From Premium Times Nigeria · Oladeinde Olawoyin · · 1m 50s
IMF urges Nigeria to target subsidy savings for poor
IMF says Nigeria must direct subsidy reform savings to vulnerable citizens.
In brief
IMF says Nigeria must direct subsidy reform savings to vulnerable citizens. IMF advises Nigerian government to ensure subsidy savings from reforms reach poor citizens directly. Originally reported by Premium Times Nigeria.
IMF regional economic outlook
The International Monetary Fund urged Nigerian government and other African economies to ensure subsidy savings from reforms reach poor citizens directly.
“And our advice in many places has been to phase these subsidies gradually, and make sure that what you save from the subsidy reform is well targeted to those who actually need it”
IMF director speaks
Zeine Zeidane, IMF's African Department director, advised governments to protect vulnerable populations during subsidy removal.
“it’s not specific to nigeria, if you look at our programme, we have many programmes but we have always indicated target on social spending”
Nigeria's subsidy reforms
Nigeria introduced reforms to fix economic structure after abolishing wasteful subsidy regime and tax reforms.
“the government introduced reforms in the foreign exchange market, abolished what it termed a wasteful, corruption-ridden subsidy regime amid fiscal pressures”
IMF on subsidy impact
IMF states subsidies benefit wealthy populations while straining government finances and fiscal stability.
“so if you do a certain amount of subsidies, most of it is going to those who don’t need it”
Targeted support needed
IMF recommends phasing subsidies gradually and directing savings to vulnerable citizens for better fiscal outcomes.
“it’s better to support people who need support than supporting product that actually can affect both your fiscal position but also for oil importers”
Nigeria's inflation situation
Nigeria's inflation eased to 14.63% in September according to IMF analysis.
“nigeria’s inflation eases to 14.63% in september”
IMF growth projections
IMF forecasts Sub-Saharan Africa will grow 4.5% in 2026 and 2027 despite regional economic challenges.
“sub-saharan africa is expected to grow by 4.5 percent in both 2026 and 2027”
Fiscal challenges in Africa
High interest burdens and low reserves threaten many african countries with limited room for economic shocks.
“high interest burdens, low reserves in many countries, and falling aid leave limited room for absorbing another adverse shock”
IMF advice for Nigeria
IMF advises Nigeria to mobilize domestic revenue outside oil sector for education, health, and infrastructure.
“on the growth side, the imf said its advice for the government has always been to, on one side, mobilise more domestic revenue outside the oil sector”
Private sector growth
IMF highlights nigeria's potential for private sector growth through young entrepreneurs and tech-savvy population.
“nigeria is a country that has a lot of dynamism, a lot of young entrepreneurs, young tech-savvy populations”
Structural reforms needed
IMF recommends structural reforms to improve business environment and integration for economic growth.
“so all this will certainly help accelerate growth and create jobs”
Regional economic outlook
Sub-Saharan Africa faces risks but has made progress in fiscal adjustment and debt management.
“pre-war fiscal adjustment and declining debt ratios are important achievements”
Inflation concerns
IMF warns of persistent inflation despite recent easing in nigeria's inflation rate.
“the report said risks remain decidedly tilted to the downside”
Next steps for nigeria
Nigeria must target subsidy savings for vulnerable citizens to avoid economic setbacks.
“it’s important to have a targeted system of support to the most vulnerable components of society”
The takeaway
IMF advises Nigerian government to ensure subsidy savings from reforms reach poor citizens directly.
