The International Monetary Fund (IMF) has denied any role in Nigeria’s recent decision to remove fuel subsidies, emphasizing that the decision was solely Nigeria’s own.
This comes amid growing criticism that international pressure influenced Nigeria’s government, which has faced increasing scrutiny over the rising cost of living since subsidies were removed.
The IMF clarified its stance during its Annual Meetings with the World Bank in Washington DC.
Speaking on the issue, IMF Director for Africa, Mr. Abebe Selassie, stressed that the IMF did not influence Nigeria’s choice to remove fuel subsidies.
Selassie said, “The decision was a domestic one. We don’t have programs in Nigeria. Our role is limited to regular dialogue, as we have with other nations like Japan or the UK.”
The IMF’s comments follow months of hardship for Nigerian citizens, who have faced sharp rises in fuel prices, transportation costs, and food inflation.
Since the subsidy was removed, many Nigerians have found themselves struggling to make ends meet.
Economic experts argue that fuel subsidy removal, while challenging for citizens, can free up funds for other critical sectors like health and education.
The Nigerian government has said the removal is part of a long-term economic plan to stabilize the economy and reduce reliance on oil revenues.
In Nigeria, fuel subsidies had long kept pump prices affordable for the average citizen, but the cost was a heavy burden on the national budget.
According to government data, Nigeria spent around N4 trillion on fuel subsidies in 2022 alone, a figure that far exceeded budget allocations for healthcare and education combined.
By removing the subsidy, the government claims it can direct funds toward sustainable development and invest in sectors that will create jobs and improve infrastructure.
Despite these promises, the impact of subsidy removal has been harsh for many Nigerians.
Prices for goods and services have risen dramatically, and inflation has hit a record high, putting essential items out of reach for many households.
Critics of the IMF often argue that it pressures developing nations to adopt policies that prioritize economic reforms over immediate social needs.
However, Mr. Selassie was clear that the IMF had no direct involvement in the Nigerian government’s decision to end the subsidy program.
Selassie explained, “While we discuss best practices for managing public resources, ultimately, these are profound domestic and political decisions that the government had to make.”
Still, the IMF’s emphasis on “public resource efficiency” aligns with the Nigerian government’s message that the subsidy removal is part of a strategy to achieve long-term economic stability.
The IMF has historically advocated for countries to move away from subsidies, which it argues are often unsustainable and benefit only a small segment of the population.
Yet, the IMF’s African Director acknowledged the steep cost of subsidy removal on Nigeria’s most vulnerable groups.
“We recognize the significant social costs involved,” Selassie admitted.
He urged the Nigerian government to cushion the economic blow for struggling Nigerians by implementing robust social protection programs.
The IMF has previously recommended targeted social investment as a way to ease the economic impact on low-income groups.
These programs could include cash transfers, food aid, and support for small businesses to help citizens cope with rising prices.
In recent months, the Nigerian government has hinted at plans to roll out social intervention programs but has yet to fully deliver on these promises.
Nigerians continue to demand tangible support, calling for programs that provide immediate relief for food, transportation, and other basic needs.
During the press conference, Mr. Selassie reiterated the importance of social investment as a buffer during economic transitions.
He said, “The government can mitigate these by expanding social protection for the most vulnerable.”
Many Nigerians see the IMF as a shadowy influence in the background, pushing their government to adopt tough reforms at the expense of social welfare.
But IMF officials argue that Nigeria’s leaders must make their own choices on issues like subsidy removal.
Selassie’s remarks were intended to clarify that the IMF’s involvement with Nigeria is limited to “regular dialogue,” as it is with other nations.
He underscored that the IMF has no active financial program in Nigeria.