- The IMF calls for the removal of fuel and electricity subsidies
- Asks FG to improve revenue collection and mobilisation
- Says government need to strengthen public trust in governance
The International Monetary Fund (IMF) has called for the removal of fuel, electricity subsidies by the Federal Government (FG). In addition, the IMF has also called for reforms in several aspects of governance in the country, including fiscal governance, fluctuating exchange rates, and trade.
According to the predictions by the IMF, the fiscal deficit is expected to worsen in the short term despite oil prices reaching highs. The organisation has recommended the removal of fuel and electricity subsidies as a short-term priority for the FG.
”The complete removal of regressive fuel and electricity subsidies is a near-term priority, combined with adequate compensatory measures for the poor. The mission stressed the need to fully remove fuel subsidies and move to a market-based pricing mechanism in early 2022 as stipulated in the 2021 Petroleum Industry Act.” the IMF said.
”In addition, the implementation of cost-reflective electricity tariffs as of January 2022 should not be delayed. Well-targeted social assistance will be needed to cushion any negative impacts on the poor, particularly in light of still elevated inflation,” it added.
The IMF further stated that Nigeria needs to rebuild public trust in the system with transparency in governance. In addition, the FG has to improve revenue collection and mobilisation as critical factors for sustainability.