Tinubu’s fuel subsidy removal was independent decision – IMF clarifies

The International Monetary Fund (IMF) has clarified that Nigeria’s recent decision to remove fuel subsidies was a choice made solely by President Bola Tinubu, and not a recommendation from the IMF.

This statement was made by Abebe Selassie, IMF’s Director for the African Region, during a press briefing on the sidelines of the IMF and World Bank Annual Meetings held in Washington, D.C.

Selassie emphasized that the move was a result of Nigeria’s own policy direction, aiming to address economic challenges within the country.

This clarification highlights that, while international bodies may often support reforms in nations facing economic difficulties, the ultimate decisions rest with each nation’s leadership.

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President Tinubu’s subsidy removal has stirred a lot of discussion in Nigeria, with proponents seeing it as a step toward economic sustainability and critics expressing concern over rising living costs.

“The decision was a domestic one. It was President Tinubu’s decision. We don’t have programmes in Nigeria. Our role is limited to regular dialogue, as we have with other nations like Japan or the UK,” he said.

President Tinubu during his inauguration in May 2023 declared that fuel “subsidy is gone”. That pronouncement immediately led to a hike in the cost of the commodity across the country. From about ₦200 per litre, the product is selling for about ₦1,200 in several parts of Nigeria.

Months after that, the Tinubu government also floated the country’s currency – the naira as part of reforms to shore up the economy.

But those twin moves have led to a sharp spike in the cost of living. The price of essential commodities has continued to soar with inflation reaching 32.72 per cent, pushing basic items beyond the reach of millions of Nigerians.

In the face of the harsh economic climate in the country, President Tinubu has repeatedly called for patience from Nigerians and insisted there is no going back on the reforms.

He believes his government’s reforms will be beneficial to Nigerians in the long run and has in the interim introduced a series of interventionist measures to buffer the impacts of the policies.

The IMF African Region Director has lauded these policies and wants the Federal Government to roll out more programmes to protect vulnerable groups against the effects of the reforms.

“We recognize the significant social costs involved,” Abebe said. “The government can mitigate these by expanding social protection for the most vulnerable.”