The International Monetary Fund (IMF) has urged the Federal Government to improve revenue collection, eliminate tax system distortions and reduce wasteful spending as Nigeria faces rising public debt and debt-servicing costs.
The Fund also recommended targeted transport subsidies to protect vulnerable Nigerians from rising fuel prices, warning that blanket subsidies are costly and often fail to direct support to those who need it most.
The recommendations were made by the IMF’s Fiscal Affairs Department Director, Rodrigo Valdés, and Division Chief, Davide Furceri, during a briefing on the October 2026 Fiscal Monitor report at the ongoing IMF/World Bank Annual Meetings in Bangkok, Thailand.
Nigeria’s public debt rose by 71 per cent to N166.788 trillion at the end of June 2026, from N97.34 trillion at the end of 2023, despite increased government revenue following fiscal reforms.
Valdés said governments should channel resources towards vulnerable households rather than subsidising fuel consumption across the board. He suggested targeted assistance, including transport support, to cushion the impact of higher fuel prices.
Furceri urged Nigeria to strengthen revenue mobilisation to meet rising interest obligations and finance investments that support economic growth. He also called for spending to be prioritised in critical sectors such as education, healthcare and infrastructure.
The IMF acknowledged that targeted support could be difficult without comprehensive national registries and digital payment systems but recommended alternatives, including school feeding programmes, geographical targeting and assistance for vulnerable farmers.
The Fund warned that rising global public debt and higher interest rates could increase debt-servicing pressures, urging governments to strengthen tax systems, improve spending efficiency and adopt credible fiscal plans.
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