IMF: Nigeria has final say on petrol subsidy removal
According to the Director of the IMF’s African Department, Abebe Selassie, the decision on whether or not to remove petrol subsidies in Nigeria remains a political and domestic one for the country’s leadership. Selassie highlighted that Nigeria spends a significant amount on petrol subsidies when there is a need for investment in other sectors such as health and education. He noted that determining when and to what extent to subsidize is a deeply political and domestic matter. While Selassie expressed that subsidies tend to benefit richer households, he acknowledged that it is ultimately the government’s decision. Selassie also emphasized that growth in sub-Saharan Africa is expected to slow due to a funding squeeze resulting from a lack of aid and access to private finance. This shortage of funding could force countries to reduce fiscal resources for critical development, hindering the region’s true potential. Selassie called for the consolidation of public finances, financial management, containing inflation, allowing exchange rates to adjust, mitigating the adverse effects on the economy, and ensuring that efforts to tackle climate change do not crowd out financing for basic needs like health and education.