The International Monetary Fund is stressing the importance of Nigeria’s government fully implementing its cash transfer program aimed at supporting vulnerable households.
In a document titled, “IMF Staff Completes 2024 Article IV Mission to Nigeria,” published on Monday, the IMF highlighted the necessity of this step before addressing costly fuel and electricity subsidies.
According to the IMF, the existing social safety net program, designed to provide cash transfers to impoverished individuals, must operate at its maximum capacity to ensure economic vulnerable segments remain protected while adjustments are made to subsidy frameworks.
This recommendation comes amidst concerns raised by the IMF regarding the fiscal burdens resulting from subsidizing fuel and electricity.
The statement followed a recent visit by an IMF team led by Axel Schimmelpfennig, the IMF Mission Chief for Nigeria.
Continuing to cap fuel pump prices and electricity tariffs below their recovery costs could result in Nigeria incurring fiscal expenses of up to three per cent of its Gross Domestic Product in 2024, the report noted.
During the 2024 Article IV Consultations, the IMF team engaged in discussions with key Nigerian officials in Lagos and Abuja from February 12 to February 23, 2024.
