IMF urges transparency in Nigeria’s oil sector

…warns of new economic shocks in sub-Saharan Africa

The International Monetary Fund has called for transparency in Nigeria’s oil sector to ensure the gains from fuel subsidy removal are not lost to inefficiencies and opacity, but delivers more resources into government coffers and better livelihoods for citizens.

While commending the Nigerian government’s bold move to eliminate costly fuel subsidies—a long-standing drain on public finances—the IMF warned that without clear accountability mechanisms in place, the anticipated fiscal dividends may fail to materialise.

“We have been commending bold reforms by the government, but we need to see a little more transparency in the oil sector to ensure that fuel subsidy removal can result to more flow of resources into government coffers,” Abebe Aemro Selassie, Director of the IMF’s African Department said on Friday while briefing on the regional economic outlook for Sub-Saharan Africa (SSA) in Washington.

The Fund’s comments come amid rising public scrutiny over how savings from the subsidy reform are being deployed, and lingering concerns about leakages within the Nigerian National Petroleum Company Limited (NNPC) and related agencies.

“For Nigeria, where oil revenue remains a critical fiscal anchor, the recent drop in global prices is particularly concerning,” the report noted.

Combined with higher global interest rates, which are increasing the cost of borrowing, the nation’s already limited fiscal space is under further stress.

This is just as the fund warned that the region’s fragile is now under renewed pressure as a wave of fresh global shocks threatens to derail hard-won economic gains.

After weathering four years of crises—from the pandemic to global inflation shocks—the region had begun charting a cautious path toward growth.

But new global headwinds including surging borrowing costs, tighter external financing, weaker global demand, and falling prices for key commodity exports are fresh shocks clouding the outlook, and complicating that trajectory.

“This is a serious test for policymakers in sub-Saharan Africa,” the IMF said, emphasizing that already-limited fiscal and monetary space has been further constrained.

“The road to economic stability and sustainable development just got steeper.”

The shifting landscape is especially painful for governments that were striving to balance macroeconomic stabilization with ambitious development goals—often under intense social pressure.

Many had begun to see tentative signs of recovery, but the latest wave of shocks is forcing a rethink.

The Fund stressed that resilience – which it defines as a country’s ability to rebound quickly from future shocks – must now become the cornerstone of policy frameworks. Building buffers, maintaining policy consistency, and reinforcing institutional credibility are more critical than ever, the report stated.

While the region’s progress and perseverance in recent years is “notable,” the IMF flagged that the path ahead demands careful navigation.

“Caution, consistency, and credibility are now more important than ever,” it emphasised.

Details later…