IMF Says Nigeria’s Renewed Use of Fuel Subsidies is a Concern

The International Monetary Fund has raised concerns about Nigeria's renewed subsidisation of fuel prices and urged it to maintain efforts to unify exchange rates that have underpinned a currency black market.

The IMF reiterated the importance of introducing a market-based fuel pricing mechanism and the need to deploy well-targeted social support to cushion any impact on the poor. It recommended stepping up efforts to strengthen tax administration to mobilise additional revenues and help address priority spending pressures. The IMF's comments come after the World Bank this week said the central bank's management of the foreign exchange regime had reduce access to foreign exchange, undermining investor confidence and investment appetite.

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has warned that rather than being a positive development, the rising prices of crude oil in the international market could cause major challenges for resource-dependent nations like Nigeria. The IMF team, led by Jesmin Rahman, noted that the Nigerian economy has started to gradually recover from the negative effects of the Covid-19 global pandemic.

InFocus

Lagos, Nigeria (file photo).

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