The International Monetary Fund has reiterated its endorsement of the Nigerian government’s recent economic policies, particularly the removal of the petrol subsidy and the shift to a floating exchange rate, under the leadership of President Bola Tinubu.
These reforms, advised by Bretton Woods institutions, have sparked significant backlash among Nigerians. The removal of the subsidy on Premium Motor Spirit and the floating of the naira have contributed to inflationary pressures in the country, affecting the cost of living for many.
During a briefing at the IMF and World Bank Annual Meetings, the IMF’s African Region Director, Abebe Selassie, clarified that the IMF did not directly advise President Tinubu to remove the fuel subsidy, emphasizing that the decision was ultimately his.
An IMF spokesperson, however, later confirmed to Premium Times that the institution stands by its overall recommendations to the Tinubu administration. “We stand by our advice, though it’s important to underscore that individual pieces of that advice cannot be viewed in isolation,” the spokesperson stated.
The spokesperson elaborated, “Our advice is a comprehensive policy package where all elements are linked to each other. That package seeks to ensure macroeconomic stability and raise living standards in a sustainable fashion.”
The IMF emphasized that its recommendations on petrol subsidies and the exchange rate are part of a broader policy approach that includes social safety measures.
“Importantly, our advice on petrol subsidies and the exchange rate is set in a larger, comprehensive policy mix that also includes scaling up social transfers to provide relief to Nigerians who are already suffering from a cost-of-living crisis or who are impacted by policy reforms,” the spokesperson explained.
Additionally, the IMF spokesperson referenced its 2024 report on Nigeria, released in May, noting that IMF executive directors “welcomed the bold reforms implemented by the new administration and commended the authorities’ focus on revenue mobilization, governance, social safety nets, and upgrading policy frameworks in the face of Nigeria’s significant economic and social challenges.”
