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The International Monetary Fund (IMF) has warned that continuation of fuel and electricity subsidy will cost Nigeria N2.33 trillion or three per cent of its Gross Domestic Product, GDP in 2024. The warning was contained in the report of the just- concluded Staff Article IV Consultations, which was issued by the IMF Country Office in Abuja, yesterday. According to the Fund, “The capping of fuel pump prices and electricity tariffs below cost recovery could have a fiscal cost of up to 3 percent of GDP in 2024.” Given   the country’s   real GDP of N77.93 trillion, three percent projected by IMF amounts to N2.33 trillion. The team led by Axel Schimmelpfennig, IMF Mission Chief for Nigeria visited Lagos and Abuja, February 12–23, 2024, to hold discussions for the 2024 Article IV Consultations with Nigeria. The staff urged the federal government to implement social safety nets through the cash-transfer programme before addressing the fuel subsidies and electricity tariffs below cost recovery. According to the report, “Recently approved targeted social safety net program that will provide cash transfers to vulnerable households needs to be fully implemented before the government can address costly, implicit fuel and electricity subsidies in a manner that will ensure low-income households are protected.

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