The IMF official said that Nigeria lacks effective programs. He said, “Nigeria is a place we don’t have programmes.” He compared Nigeria’s situation to Japan or the UK, where dialogues lead to better public resource usage.
“Nigeria needs a lot of investment in infrastructure, health, and education,” he added. He stressed the deep domestic and political choices the government must make. These choices are vital for making effective use of public resources. They could lead to significant economic growth in the long run.
Addressing the challenges of fuel subsidy removal
Abebe acknowledged the suffering caused by the fuel subsidy. He urged the federal government to implement social investments. These investments would help vulnerable populations cope with the reform pains. The pains caused Ngerians made former Vice President Atiku Abubarker to brand President Bola Tinubu as “T-pain”
“We recognize that this entails a lot of costs,” he stated. “This can be done by rolling out social protection, particularly for the vulnerable.”
He noted that reforms often lead to dislocation. “The immediate effect of doing these changes always causes quite a lot of dislocation,” he explained. Rising food prices add to the difficulties.
“Some savings from the fuel subsidy removal should be channeled to social protection,” he suggested. This would cushion the effects on the most vulnerable households.
Policy actions and economic challenges
The director discussed tough policy actions needed to address various challenges. Policymakers must focus on development and social protection. They also need to ensure that reforms are socially acceptable.
Abebe shared lessons learned from other member countries. He highlighted the importance of avoiding excessive costs where investments are necessary. “They have to continue to spend money on education, on health to sustain growth,” he said.
He pointed out Nigeria’s high inflation. The government faces a difficult balancing act. “This is a difficult trade-off that the government of Nigeria is faced with,” he noted. The situation before fuel subsidy removal was unsustainable.
Regional economic outlook and social stability
The Regional Outlook report showed sub-Saharan African countries implementing necessary reforms. These aim to restore macroeconomic stability. Despite some improvements, challenges remain.
“First, regional growth, at a projected 3.6 per cent in 2024, is generally subdued,” the report stated. It also noted tight financing conditions as a significant hurdle.
The complex issues of poverty and weak governance compound the situation. A higher cost of living fuels social frustration. Policymakers must strive for macroeconomic stability while addressing development needs.
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