The International Monetary Fund (IMF) has urged the Federal Government to introduce targeted cash transfers and temporary income support for vulnerable households to cushion the effects of rising living costs, reduce poverty and improve food security.
The Fund stressed that social protection measures should be accompanied by improved public spending efficiency and stronger revenue mobilisation to support fiscal consolidation and place Nigeria’s public debt on a sustainable downward path without worsening economic hardship.
Chief of the IMF Research Department’s World Economic Studies Division, Deniz Igan, made the recommendations during a press briefing on the Fund’s World Economic Outlook at the ongoing IMF/World Bank Annual Meetings in Thailand.
Igan noted that despite Nigeria’s economic growth and position as an energy-exporting country, the high cost of living continues to place significant pressure on households, particularly amid rising food and energy prices.
She explained that essential goods account for a substantial share of household expenditure, making price increases especially difficult for low-income earners and vulnerable families.
Against this backdrop, the IMF official advocated targeted and temporary financial assistance for households most affected by the economic pressures.
According to her, cash transfers and income-support programmes could help reduce poverty and improve access to food while providing immediate relief to struggling Nigerians.
However, Igan emphasised that such interventions must be supported by a credible medium-term fiscal framework to ensure that social protection spending remains financially sustainable.
She called for measures to improve the quality of public expenditure and strengthen revenue collection, noting that effective fiscal management is necessary to reduce the debt burden without placing additional pressure on vulnerable citizens.
The IMF’s recommendations also highlighted the delicate balance policymakers must maintain between controlling inflation and supporting economic activity.
Addressing the implications of oil-price shocks, Igan explained that central banks face a difficult policy choice when rising prices are driven by supply-side disruptions rather than excessive consumer demand.
She noted that such circumstances require monetary authorities to assess the underlying causes of inflation and the broader economic conditions before determining an appropriate response.
According to her, central banks must remain focused on price stability and ensure that inflation returns to target within the relevant policy horizon, typically two to three years, while considering the effects of restrictive monetary policy on economic activity.
For Nigeria, the IMF’s position underscores the importance of combining economic stabilisation measures with targeted social interventions to protect households from the effects of persistent price pressures.
The proposed approach would require the government to strengthen revenue generation, ensure greater value for public expenditure and direct financial assistance towards those most in need.
The central policy challenge remains how to restore fiscal sustainability and contain inflation while ensuring that the burden of economic adjustment does not fall disproportionately on ordinary Nigerians.