The International Monetary Fund wants the Federal Government to put money directly in the pockets of struggling Nigerians. At the IMF/World Bank Annual Meetings in Bangkok, Thailand, Deniz Igan, Chief of the IMF Research Department's World Economic Studies Division, called for targeted cash transfers and temporary income support for the country's most vulnerable households, saying the population is suffering despite economic growth.
Speaking during a press briefing on the Fund's World Economic Outlook, Igan was blunt about the paradox Nigerians know too well. The economy is growing, the country exports energy, yet the cost of living keeps biting harder.
Why the IMF says Nigerians are still struggling
Although economic growth has held up in Nigeria, given that it is an energy exporter, living costs are still very high, Igan said. We are very mindful that the population is suffering.
The pressure, she explained, comes from the rising prices of essential goods, especially food and energy, which take up a huge share of what ordinary households spend every month. When those two items spike, no amount of headline GDP growth puts food on the table.
Cash transfers, but with conditions attached
The Fund's prescription is direct: cash transfers and targeted, temporary income support for the most vulnerable households in Nigeria. According to Igan, such transfers can help reduce poverty and improve food security, cushioning the immediate effects of hardship on poor families.
But there is a catch. The IMF insists the support must come with a credible medium-term fiscal framework focused on improving the quality of public expenditure and strengthening revenue collection. The goal, Igan said, is to help the Federal Government achieve fiscal consolidation and put public debt on a sustainable downward path without worsening the hardship faced by ordinary Nigerians.
What this means for monetary policy
Igan also addressed the tough balancing act facing central banks when an oil price shock pushes up inflation without any real increase in demand. She called it a classic case of a policy trade-off: inflation is high, but economic activity is being constrained by the shock.
Her advice to monetary authorities was clear. Keep the focus on price stability, keep the policy stance sufficiently restrictive, and make sure inflation returns to target within the policy horizon, which the IMF typically considers to be two to three years. At the same time, policymakers must weigh the effects on economic activity, labour-market conditions, and each economy's exposure to the shock.
For Nigeria, the message lands at a critical moment. The country needs fiscal discipline and price stability, but not at the expense of the millions already stretched thin. Whether Abuja listens, and how it funds these transfers without piling on more debt, will define the next chapter of this reform journey.
FAQ
What did the IMF recommend for Nigeria?
The IMF recommended targeted cash transfers and temporary income support for Nigeria's most vulnerable households, alongside improved public spending quality and stronger revenue collection to reduce debt sustainably.
Who made the IMF's statement on Nigeria?
Deniz Igan, Chief of the IMF Research Department's World Economic Studies Division, made the remarks at a press briefing on the World Economic Outlook during the IMF/World Bank Annual Meetings in Bangkok, Thailand.
Why does the IMF say Nigerians are suffering despite growth?
Igan said living costs remain very high despite Nigeria's economic growth as an energy exporter, with rising prices of food and energy, which dominate household consumption, hitting the population hardest.