As Nigerians groan under the aftermath of fuel subsidy removal, the International Monetary Fund (IMF), on Friday categorically stated that it had no hand in the decision of President Bola Tinubu administration to remove petrol subsidy.

The Washington-based Fund had come under severe criticisms in recent times for its perceived roles in some of the reforms of the Bola Tinubu-led government, some of which have brought untold hardships to Nigerians.

Addressing a press conference during the ongoing IMF and World Bank Annual Meetings in Washington DC, Mr. Abebe Selassie, IMF’s African Region Director, said the decision of Nigeria government to remove fuel subsidy in May last year, was purely a domestic affair and the Fund had no input in it.

Selassie, clarified: “The decision was a domestic one. We don’t have programmes in Nigeria. Our role is limited to regular dialogue, as we have with other nations like Japan and the UK.”

The IMF Director admitted that IMF provides guidance on public resource management, but pointed out that while Nigeria needs substantial investment in infrastructure, healthcare, and education, the government’s decision to stop fuel subsidy was a reflection of its long-term strategy for sustainable economic growth.

“Ultimately, these are profound domestic and political decisions that the government had to make and the IMF sees these choices as steps toward greater public resource efficiency”, he said.

The IMF, however said Implementation of social investments would help cushion the effects of the subsidy removal, and assist vulnerable Nigerians cope with government reforms.

“We recognize that this entails a lot of costs, in terms of social investment costs. This can be done by rolling out social protection, particularly for the vulnerable.

“The immediate effect of doing these changes always causes quite a lot of dislocation. We do not doubt that the situation is extremely difficult. On top of the situation where food prices have been quite acute in our region and affect other essential goods.

“Some of the savings from the fuel subsidy removal should be channelled to social protection to help cushion the effects on the most vulnerable households. Those are our views as it continues to sustain the reforms”, he added.

He further added: “Against this background, we have discussed the tough policy actions that policymakers need to take to address the challenges that confront their various countries. They have to make room to spend on development and social protection and to do socially acceptable reforms.”

According to the IMF director, over the years, his organization had learnt a lot of lessons from reforms carried out by member countries that it had worked with and that at the moment, it made sure that reforms advised by the IMF do not result in heightening inequalities or increase the difficulties of the vulnerable.

“For instance, we emphasise how important to avoid spending costs where investment is necessary especially why they have to continue to spend money on education, on health in order to sustain growth and improve social outcomes,” he stressed.

He further that with Nigeria is facing high inflation currently needed a lot of balancing art, especially in terms of funding needed to provide social investments for the poor and the investments needed in infrastructure to grow the economy.

“This is a difficult trade-off that the government of Nigeria is faced with at the moment, adding that the economic situation in Nigeria pre-dating the removal of fuel subsidies was not sustainable”, he stressed.

The report noted that countries in the region are still grappling with macroeconomic imbalances, tight financing conditions, amid rising social pressures, leaving policymakers facing difficult choices in implementing reforms.

“Sub-Saharan African countries are navigating a complex economic landscape marked by both progress and persistent vulnerabilities,” said Abebe Aemro Selassie, Director of the IMF’s African Department.

“While many of the region’s countries are among the world’s fastest-growing economies, resource-intensive countries —particularly oil exporters— continue to struggle with lower growth rates. Inflation is declining but remains in double digits in nearly one-third of countries. Public debt has stabilized at a high level, with rising debt service burdens crowding out resources for development spending.”

“While we are seeing some improvement in macroeconomic imbalances, growth remains insufficient to significantly reduce poverty or address substantial developmental challenges in the region.”

The report includes focused notes addressing critical issues facing the region: the urgent need for job creation, the economic divergence between resource-rich and non-resource-rich countries, and the positive effects of striving for greater gender equality.

Against this backdrop, Selassie pointed to priorities for policymakers in the region:

“The policy mix should be consistent with the size of macroeconomic imbalances, while taking into account the political economy constraints that will affect the pace of reforms.

“Countries with high macroeconomic imbalances are more likely to resort to relatively large and frontloaded fiscal reforms, given the tight financing constraints. The need for financial support from the international community is most acute for this group.

“For countries with lower imbalances, policymakers should consider easing monetary policy toward a more neutral stance, while rebuilding fiscal and external buffers over time.”

“Policymakers need to focus on designing reforms that are socially acceptable, including effective communication and consultation strategies and measures to protect the most vulnerable.

“With continued efforts, sub-Saharan Africa can address its current challenges and move towards more sustainable and inclusive growth,” Mr. Selassie concluded. “However, the path ahead requires careful policy calibration and a strong commitment to implementing necessary reforms while managing social pressures.”