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IMF Reaffirms Support for Naira Float and Fuel Subsidy Removal in Nigeria

Published by admin on October 31st, 2024.

IMF Reaffirms Support for Naira Float and Fuel Subsidy Removal in Nigeria

The International Monetary Fund (IMF) has reiterated its recommendation for Nigeria to eliminate the petrol subsidy and allow the naira to float freely.

Reports from Daily Trust indicate that the Bretton Woods institution has faced criticism for allegedly influencing President Bola Tinubu’s economic policies, particularly regarding the subsidy removal and naira floatation, which have contributed to rising inflation in the country.

During a briefing at the IMF and World Bank Annual Meetings in Washington, D.C., Abebe Selassie, the IMF’s Director for the African Region, clarified that the decision to remove the fuel subsidy was made by President Tinubu and was not a direct recommendation from the IMF. He emphasized that the IMF’s engagement with Nigeria is limited to regular discussions, similar to those it maintains with other countries like Japan and the UK.

In a statement to PremiumTimes, an IMF spokesperson confirmed that the organization stands by its recommendations to the Nigerian government. They emphasized that the advice should be seen as part of a broader policy framework, where each component is interconnected. This framework aims to promote macroeconomic stability and improve living conditions sustainably.

The spokesperson also highlighted that the advice regarding petrol subsidies and exchange rate adjustments is designed to be part of a larger strategy that includes increasing social transfers to support Nigerians facing the cost-of-living crisis and the impacts of these policy reforms.