The Presidency, on Tuesday, criticised the International Monetary Fund (IMF) over what it called an overly harsh and unbalanced review of Nigeria’s current economic reforms, inflation trends, and poverty situation.
It will be recalled that the IMF, in a report released last week and titled “How Nigeria Can Unleash Its Economic Potential,” painted a troubling picture of the country’s economic performance in recent years, highlighting persistent inflation and deep poverty.
The report stated: “Upon taking office in 2023, the new government faced low growth and rising poverty. Between 2014 and 2023, real per capita GDP declined on average by 0.7 per cent annually. In 2023, the poverty rate stood at 42 per cent.
‘’This difficult situation was compounded by limited access to dollars, which meant that people had to turn to the parallel currency market and thereby pay a much higher price than the official rate. In the meantime, public finances were strained by an opaque fuel subsidy system, which also caused recurrent petrol scarcity. And central bank financing of the fiscal deficit pushed up inflation.
“In response to these challenges, Nigerian policymakers have embarked on a series of bold reforms over the last two years. In 2023 the new government and the Central Bank of Nigeria liberalised the foreign exchange market, stopped central bank financing of the fiscal deficit, and reformed fuel subsidies. The government also strengthened revenue collection, which is still one of the world’s weakest.
“Since these reforms were implemented, international reserves have increased, and anyone can now access foreign exchange in the official market. Nigeria successfully returned to international capital markets last December and was recently upgraded by rating agencies. A new domestic, private refinery is positioning Nigeria up the value chain in a fully deregulated market.
“While progress has been encouraging, significant challenges remain. Inflation still exceeds 20 percent. Poor infrastructure, especially for electricity, inhibits economic activity. Poverty and food insecurity remain high. Nigeria lacks an effective social safety net to cushion the impact of shocks on the most vulnerable.”
The IMF suggested that Nigeria must design a better budget framework and channel the funds saved from removing fuel subsidies into critical infrastructure and welfare projects. It also advised aligning tax rates with those of neighbouring countries once Nigeria’s cash transfer system is fully working. Additionally, it asked the Central Bank of Nigeria (CBN) to keep a strict monetary stance to tackle inflation and restore faith in the economy.
But reacting yesterday on Channels Television’s “The Morning Brief,” Special Adviser to President Bola Tinubu on Economic Affairs, Tope Fasua, openly challenged the IMF’s approach and frequent statements, which he described as excessive and unsettling.
Fasua said: “This administration under President Tinubu has done some of the deepest reforms we have seen in a while. We only just got the tax bills signed into law—bills that offer relief to low-income earners and double the tax threshold for small businesses.
“We haven’t even allowed those measures to settle, yet we’re hearing all sorts of very fatalistic statements from different places, including, unfortunately, the IMF.”
He noted that the IMF’s constant statements were beginning to feel like “heckling” rather than constructive advice. “Sometimes one wants to think they go into overdrive. Almost every week or every two to three days, there’s a statement on Nigeria. At the end of the day, it leaves everyone in a state of confusion,” he added.
Fasua also reminded the public that Nigeria recently repaid $3 billion to the IMF, settling a loan taken during the COVID-19 pandemic. According to him, many other countries are still struggling to repay, yet the IMF keeps issuing fresh demands on Nigeria.
“We’re not asking for a pat on the back; we’re just saying, you know what, give us a breather. Let us be able to implement the policies we’ve started. They acknowledge that the reforms are good, yet they keep demanding more, and it’s almost like being caught between the devil and the deep blue sea,” he said.
He warned that such reports could turn citizens against the government, stressing that the IMF had not properly considered the depth of the economic troubles inherited by the Tinubu administration.
“Give us a break; let us be able to know where we are going before coming at us at every angle and generally throwing us off track. It’s like a house that is completely dilapidated. And we’re being asked to provide full comfort in two years after removing the roof and working on the foundation. That’s not realistic,” Fasua noted.
He also spoke about a contradiction in the IMF’s work, pointing out that its advisory role often conflicts with its lending role, which sometimes confuses policymakers.
Fasua said: “The IMF has both an advisory and a lending arm, and sometimes it looks like their advice clashes with their lending stance. We don’t even know which to believe anymore.
“We’ve done the right things. They say they want more—but the government also has a right to say, ‘let us see how what we’ve done turns out.’ Like the president would say, ‘let the poor breathe’.”
When asked about the rising cost of living and whether the IMF’s concerns were valid, Fasua admitted that inflation and hardship remain but argued that progress has clearly been made.
“They’ve recommended even more painful reforms. They want us to keep raising interest rates but interest rates are now stabilising. The Central Bank has a view to begin to reduce them gradually,” he explained.
On inflation, he noted: “They complained inflation is high. Do they expect it to drop to single digits in a quarter? That’s unrealistic. Inflation has reduced over the last three months and will likely fall further.
“Whoever wrote that statement is not sounding like an economist because an economist is not a fantasist.”
He added that Nigeria must invest more in gathering its own reliable economic data and stop relying only on figures from international institutions like the IMF and World Bank.
“Sometimes these statements feel overrated. We should invest in collecting our own data and stop depending solely on BrettonWoods institutions. Let’s build our own capacity and data credibility,” Fasua concluded.
