The International Monetary Fund (IMF) has declared support for President Bola Tinubu’s palliatives package designed to cushion the economic impact on Nigerians after the removal of subsidy on petrol in the country.
The IMF Director, Communication Department, Julie Kozack, said the organization welcomes the recent removal of subsidies in Nigeria, and the unification of the exchange rate regime.
According to Kozack, increasing well-targeted social spending would be critical to cushion the impact of the removal of fuel subsidies on vulnerable citizens.
She added that strengthening revenue mobilisation through tax administration reforms was also essential to create fiscal space, reduce vulnerabilities, and put public debt on a sound footing.
Kozack also stated that inflation in Nigeria is expected to increase in the coming months.
“Therefore, as a result, fiscal and monetary policy tightening, including reducing Central Bank financing of government fiscal deficits are needed to prevent a further escalation of inflation,” she advised.
On the IMF’s interventions, Kozack disclosed that the organization has been part of the international response to difficult transitions countries has faced.
She said:
“For example, when thinking about the pandemic, we mounted an unprecedented response to help members deal with the pandemic and shocks after the pandemic, such as was created by Russia’s invasion of Ukraine.
“Since March 2020, we have approved over 300 billion dollars in financing for 96 countries, including concessional lending to 57 low-income countries: and we are still seeing very high demand for IMF financing…”