You’ll Spend N7 Trillion In 2024 If You Do Not Increase Electricity, Fuel Price – IMF Warns Tinubu

The International Monetary Fund (IMF) has cautioned President Bola Ahmed Tinubu that Nigeria could incur nearly N7 trillion in expenses in 2024 if the current fuel pump price cap and energy subsidies persist……READ ALSO Tinubu Defends Cabinet Size: Warns Against Merging Ministries, Citing Potential Non-Performance

According to the IMF’s projection, maintaining the fuel pump prices and electricity tariffs below their recovery costs could lead to a fiscal cost equivalent to 3% of Nigeria’s GDP by 2024.

This warning comes amidst challenging economic conditions inherited by the current administration, including low growth, reduced revenue collection, rising inflation, and persistent external imbalances.

The latest revelation follows a recent visit by an IMF team led by the IMF Mission Chief for Nigeria Axel Schimmelpfennig, during which they discussed the country’s economic policies and challenges.

The IMF highlighted the federal government’s decision to cap retail fuel and electricity prices, ostensibly aimed at alleviating the impact of rapidly rising inflation on living conditions, albeit partially reversing the fuel subsidy removal.

President Tinubu’s elimination of fuel subsidies, declared during his inauguration speech on May 29, 2023, led to a significant increase in the cost of products and services nationwide. Since then, fuel prices at NNPC fueling stations have surged from N185 to as high as N700 per liter, depending on the location countrywide.

The IMF’s warning underscores the urgency for the Nigerian government to address the subsidy issue and implement measures to ensure sustainable economic growth and stability.