In response to Nigeria's ongoing fuel pricing and supply challenges, the International Monetary Fund (IMF) has called on the Federal Government to prioritize the protection of vulnerable citizens from the impact of rising petrol prices. Speaking in an interview with Arise TV, Christian Ebeke, IMF's Resident Representative in Nigeria, emphasized the importance of accelerating social safety programs to support those hardest hit by economic policies, particularly amid the current inflation and multiple economic shocks.
Ebeke noted that petrol prices in Nigeria remain below market rates, suggesting a potential further increase. This comes on the heels of a similar statement from the Nigerian National Petroleum Company Limited (NNPCL). He expressed concern about the hardships Nigerians are enduring due to a combination of high inflation, food shortages, and the recent floods, all of which are straining the nation's economy.
"The upward adjustment in petrol prices is occurring at a time when Nigerians are already grappling with significant difficulties," Ebeke stated. "The government’s support program, which aims to reach 15 million households, is crucial. However, it needs to be accelerated to cushion the effects of rising fuel prices on the most vulnerable."
Current Fuel Prices and Supply Issues
Ebeke also echoed concerns raised by NNPCL regarding the current non-market-reflective petrol prices, which have contributed to supply shortages and fuel station queues across the country. He stressed the importance of ensuring stability in supply while adjusting fuel prices, but reiterated that the immediate focus should be on mitigating the impact on the poor.
"If these price adjustments stabilize the fuel market, it would benefit many Nigerians, as the ongoing fuel scarcity is hindering the country’s productivity," he added.
Competition and Supply from Dangote Refinery
Addressing the controversy over the distribution of products from the Dangote Refinery, Ebeke highlighted the need for competition in the oil market. He explained that competition ensures better product quality and supply stability, which ultimately benefits consumers.
"Ensuring availability of supply and fostering competition will create a stable market and allow consumers to get the best deals," Ebeke said, advocating for policies that prioritize these principles.
Balancing Economic Reforms with Social Protection
In response to the Federal Government’s stance that its economic reforms are necessary for long-term growth, Ebeke stressed the importance of balancing policy measures. He noted that while reforms like fuel price adjustments are critical for economic stability, they must be implemented alongside social protection programs to ease the burden on the poor.
"When implementing challenging reforms, you must pair them with measures that protect the most vulnerable. It’s not just about price adjustments, but also about ensuring that people have the support they need to cope with these changes," he emphasized.
Outlook for Nigeria’s Economy in 2024
Looking ahead to Nigeria’s economic future, Ebeke acknowledged the government's ambitious plans to transform the economy, stabilize markets, and reduce poverty. However, he stressed that these efforts must be supported by adequate revenue generation, as Nigeria continues to face one of the lowest revenue-to-GDP ratios in the world.
"The government’s ability to raise revenue is crucial for financing infrastructure, healthcare, and education. These are the key areas where growth and development must be promoted," Ebeke noted.
