Protect poor, vulnerable Nigerians with savings from subsidy removal, IMF tells Nigerian govt

The International Monetary Fund (IMF) on Friday urged the Nigerian government to direct savings realised from subsidy removal to the poor and vulnerable population in the society.

Abebe Selassie, the head of the IMF’s rhetoric African Department, made this known Friday on the sidelines of the World Bank/IMF meetings in Washington, DC.

Mr Selassie spoke at the regional economic outlook for sub-Saharan Africa press conference.

Since he came into power in May 2023, the Nigerian government led by President Bola Tinubu has implemented reforms it says were aimed at recalibrating the economy and fixing structural distortions.

The government recently removed subsidies on petrol and unified the various windows of the foreign exchange market.

There have equally been reforms in the nation’s power sector, with an attendant increase in electricity tariff.

The IMF and World Bank have for several years called for these key reforms as a means to engender growth and drive economic progress.

But these policies have caused pains for many Nigerians amid elevated prices, reduced purchasing power, and endemic poverty.

Protection Measures

The IMF said it identifies that the reforms are tough and would have effects on Nigerians, especially the poor and vulnerable.

The fund noted that there is a need to put measures in place for the vulnerable in terms of social protection and other safety nets.

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The fund noted that there have been efforts in that direction but the authorities should do more in terms of putting the savings realised from the subsidy reforms to positive use.

“Some of the savings from the fuel subsidy reforms and fx subsidy being removed should now be directed to help cushion the effects on the most vulnerable households,” Mr Selassie said.