The International Monetary Fund has cautioned Nigeria against bringing back a universal petrol subsidy, urging the government to provide focused assistance to low-income and at-risk households instead as energy prices rise. Broad fuel subsidies are costly, tend to favour wealthier users and could add to budget strains at a time when borrowing expenses are increasing, the Fund said.
Nigeria has achieved meaningful economic progress, the IMF said, but the gains have not been shared evenly, with a large part of the population still facing financial hardship. Policymakers therefore need to weigh households’ immediate pressures against the need to protect fiscal sustainability over the medium term.
“Our recommendation is that policymakers strike a balance between the population’s short-term requirements, including food security and energy security,” the IMF said.
