Nigeria: Experts Caution As IMF Offers Fresh Advice On Subsidy

What the report says

The International Monetary Fund has advised Nigeria against bringing back a broad petrol subsidy, saying the government should instead focus on targeted help for vulnerable households facing higher energy costs. The comments were reported by Daily Trust and came during the IMF’s annual meetings in Bangkok, Thailand, where the fund again argued that untargeted fuel subsidies are costly and often benefit higher-income consumers more than poorer ones.

The advice lands in the middle of a heated political debate in Nigeria over fuel pricing ahead of the 2027 general election. According to Daily Trust, the federal government says it will not reverse the removal of the subsidy, while some opposition figures have called for a return to the policy. The IMF’s Rodrigo Valdés said governments should use social safety nets and household data rather than keeping fuel prices artificially low.

Experts quoted by Daily Trust offered mixed reactions. Economist Ndubisi Nwokoma said Nigeria should not accept outside advice uncritically and urged more transparency over how savings from subsidy removal are spent. He argued that citizens should see clear welfare gains from the policy. By contrast, Muda Yusuf of the Centre for the Promotion of Private Enterprise backed the IMF’s position, saying restoring a broad subsidy would revive fiscal risks and strain public finances.

The issue matters because fuel pricing in Nigeria affects transport costs, inflation, public spending and household living standards, making subsidy policy one of the country’s most sensitive economic and political questions.