ABUJA, Nigeria — Economic experts and civil society groups have warned that the International Monetary Fund’s recent policy prescriptions urging Nigeria to extend value-added tax to fuel products and introduce excise duties on telecommunications services could worsen the country’s cost-of-living crisis and harm long-term economic development.
The IMF made the recommendations in its 2026 Article IV consultation report on Nigeria, stating that further tax policy changes may be needed to sustain the government’s spending plans over the medium term. The Washington-based lender suggested extending VAT to fuel products, increasing the VAT rate, rationalising tax expenditures, and introducing telecom excises to complement administrative gains.
The International Monetary Fund, the Nigerian Federal Government, local economists including Professor Uvhe Uwaleke of Nasarawa University and Dr Umar Yakubu of the Centre for Fiscal Transparency and Public Integrity, as well as civil society groups such as the Alliance for Economic Research and Ethics, are at the centre of the debate.
The IMF has recommended new taxes on fuel and telecom services, but local experts have strongly criticised the advice, warning that it is ill-timed and could deepen poverty. Professor Uwaleke noted that Nigeria is currently experiencing one of the most severe cost-of-living crises in recent history, with households already contending with elevated food prices, transportation costs, energy costs, and declining purchasing power.
The IMF released its 2026 Article IV consultation report on June 9, 2026, and the recommendations have since generated widespread debate among economic stakeholders.
The debate is centred on Nigeria’s economic policy, with experts urging the Federal Government to exercise caution in adopting the IMF’s prescriptions. Professor Uwaleke argued that “tax policy must not be evaluated solely through the lens of revenue generation but also through its broader social and economic consequences.”
The IMF’s recommendations come at a time when Nigeria’s poverty rate has reached 63 percent based on the national poverty line, while about 27 million Nigerians faced food insecurity in the latter part of 2025. Critics argue that the IMF’s proposals would impose additional financial pressure on households and businesses at a time of elevated inflation.
The Alliance for Economic Research and Ethics described the IMF’s prescriptions as “tired” and warned that they could make “the poor get poorer, the middle class evaporate.” Dr Umar Yakubu of the Centre for Fiscal Transparency and Public Integrity noted that “the IMF has been coming at Nigeria for the past 40 years, and every time they make us implement any policy, all it does is to deepen us into further poverty.”
The proposed taxes would affect all Nigerians, particularly the most vulnerable households. Applying VAT to petrol and diesel could feed directly into transport costs, food prices and household electricity bills, while telecom excise duties would raise the cost of airtime, data and voice calls for over 150 million Nigerians who rely on mobile networks.
Professor Uwaleke suggested that before contemplating additional tax burdens, Nigeria should improve tax administration, widen the tax net, reduce leakages, enhance compliance, and stimulate economic growth, which naturally expands the revenue base. He added that the ongoing tax reforms have already addressed many of these issues.
