Nigeria Must Prioritize Cash Transfers to Vulnerable Households—IMF

The administration of President Bola Tinubu since assuming power on May 29, 2023, has introduced reforms that have put some citizens into untold hardship.

While delivering his inaugural speech almost two years ago, Mr Tinubu announced an end to the payment of subsidies on premium motor spirit (PMS), otherwise known as petrol.

His announcement pushed the price of the product from less than N200 per litre to almost N600 per litre.

PMS later reached over N1,000 per litre but the price war between Dangote Refinery and the Nigerian National Petroleum Company (NNPC) Limited has made it to be at N860 per litre at the moment, though there are speculations that it could move higher to over N900 per litre in the coming weeks due to the suspension of the Naira-for-crude deals with local refiners, including the Lagos-based Dangote Refinery.

Another reform introduced by President Tinubu is the liberalisation of the foreign exchange (FX) market, devaluing the value of the local currency to over N1,500 per Dollar at the moment. It was almost reaching N2,000 per Dollar until the Central Bank of Nigeria (CBN) made some moves, including clearing forex backlogs and putting in place an transparent system for trading called the Electronic Foreign Exchange Matching System (EFEMS).

At the IMF Press Briefing on Thursday, the Director of Communications Department of the IMF, Ms Julie Kozack, said to alleviate the sufferings of Nigerians, the federal government must quickly rollout cash transfers.

“The authorities’ policies to stabilize the economy and to promote growth are welcome, and they will, of course, need to be accompanied by targeted social transfers to support the most vulnerable populations.

“We do recognize the extremely difficult situation that many Nigerians face. And for that reason, I just want to emphasize that completing the rollout of cash transfers to vulnerable households is an important priority for Nigeria, as is improving revenue mobilization domestically,” she said.

Ms Kozack disclosed that a team from the IMF would “travel to Nigeria next week in preparation for the 2025 Article IV Consultation.”

She said earlier this month, the Deputy Managing Director of the global lender, Ms Gita Gopinath, was in Abuja and Lagos, where she met with the Minister of Finance, Mr Wale Edun, and the Governor of the CBN, Mr Yemi Cardoso, as well as civil society groups and private sector leaders.