Business
IMF Warns Against Costly Interventions Amid Food Inflation
The International Monetary Fund (IMF) has cautioned governments against the use of broad subsidies, price controls, and tax cuts as tools to address rising food and energy prices, warning that such measures could worsen inflation, strain public finances, and deepen global supply challenges.
In a May report titled “Responding to the Energy and Food Price Shock: Getting the Policy Details Right,” the Fund said policymakers face a difficult balance between protecting households and maintaining fiscal stability.
“When global energy prices spike, governments face an unenviable dilemma: shield people and businesses while straining already reduced room in public budgets or let prices rise for everyone and risk social and political backlash,” the IMF stated.
No One-Size-Fits-All Solution
The IMF noted that there is no universal response to food and energy price shocks, as countries differ in fiscal capacity, market structure, import dependence, and social protection systems.
However, it stressed that governments should allow domestic prices to reflect global market conditions, while providing targeted support to vulnerable households.
“Fiscal measures have a role to play, but they need to be temporary, targeted, timely, and tailored,” the report said.
The Fund described the current situation as a negative supply shock, where rising prices reduce purchasing power while also slowing economic activity.
Warning on Broad Subsidies and Price Controls
The IMF strongly discouraged the use of blanket subsidies, fuel tax cuts, and price caps, arguing that they are often inefficient and financially unsustainable.
According to the report, such interventions tend to benefit higher-income households more than poorer ones while distorting market signals and worsening shortages.
“Energy tax cuts, price caps, or general subsidies mute the important signals from prices, usually benefit higher-income households more, and are hard to phase out,” it said.
The Fund warned that these policies can quickly escalate fiscal costs and increase pressure on global prices by boosting demand artificially.
It added that full price freezes should be avoided except in rare and highly specific circumstances.
Targeted Support Recommended
Instead of broad interventions, the IMF recommended targeted cash transfers as the most effective way to protect vulnerable households.
It noted that lower-income families typically spend a larger share of their income on food and energy and are therefore more exposed to price shocks.
“Protecting them is important to preserving social cohesion and avoiding a surge in poverty,” the report said.
Where social safety nets are weak, the IMF suggested temporary expansion of welfare programmes or one-off support payments.
For businesses, the Fund recommended short-term liquidity support such as credit facilities, tax deferrals, or government-guaranteed loans, rather than direct subsidies.
Risks for Developing Economies
The IMF warned that emerging and developing economies face greater challenges due to weaker safety nets, higher debt burdens, and limited fiscal space.
It also noted that policy decisions in wealthier countries can have global spillover effects.
“When larger or richer countries suppress domestic price signals, global demand rises, international prices increase, and shortages worsen, hurting poorer importing countries the most,” it said.
Policy Direction
The Fund urged governments to adopt a disciplined and phased approach, prioritising targeted interventions before considering broader measures.
It stressed that well-designed policies can help economies adjust to shocks without creating long-term distortions or undermining fiscal sustainability.
“The key question is not whether to act, but how to act effectively,” the IMF concluded.
By Abigail David
Dangote Petroleum Refinery has reduced the gantry price of Premium Motor Spirit (PMS), commonly known as petrol, by N75 per litre, citing easing tensions in the Middle East and declining global energy prices.
In a circular issued to fuel marketers on Monday, the refinery announced that the new gantry price had been lowered from N1,250 to N1,175 per litre, while the coastal price per metric tonne was reduced from N1,595,790 to N1,495,215.
The refinery said the revised prices would take effect from midnight and that all outstanding unloaded gantry volumes would be repriced accordingly.
According to the company, the adjustment followed the de-escalation of geopolitical tensions in the Middle East, which had driven up crude oil and fuel prices over the past three months.
“We have reviewed our premium motor spirit gantry and coastal prices following the de-escalation of tensions in the Middle East, which has impacted energy prices,” the refinery stated.
Market data from Petroleumprice.ng indicated that Dangote Refinery’s petrol is now among the cheapest available to marketers, with many outlets previously selling the product at around N1,240 per litre.
The price cut comes as global oil prices decline amid reports of a ceasefire agreement and renewed diplomatic efforts between the United States and Iran, raising hopes for the full reopening of the Strait of Hormuz, a critical global oil shipping route.
Crude oil prices had surged during months of regional tensions, pushing domestic fuel prices higher. In Nigeria, petrol prices climbed from about N830 per litre to around N1,300 per litre, while diesel and aviation fuel also recorded significant increases.
With crude prices retreating, industry observers expect further reductions in domestic fuel prices, although refinery officials have noted that existing stocks of higher-priced crude could moderate the pace of future price cuts.
By Abigail David
Ultimate Health Management Services has intensified efforts to expand affordable health insurance coverage for Nigeria’s largely uninsured informal sector through strategic partnerships and awareness campaigns.
The initiative was highlighted during a meeting in Lagos with a delegation from the Chartered Institute of Directors (CIoD) Nigeria, led by Assistant Director Adekemi Parker, where both organisations explored collaboration to improve health insurance penetration and governance standards in the sector.
At the centre of the initiative is a new health insurance package designed for artisans, traders, transport operators, ICT professionals and small business owners. According to Ultimate Health Managing Director, Lekan Ewenla, the scheme costs N38,000 annually per enrollee and is structured to provide accessible healthcare for workers outside the formal employment sector.
Ewenla said the programme aims to reduce the heavy reliance on out-of-pocket medical expenses, noting that inadequate awareness and limited access to information remain major barriers to health insurance adoption in Nigeria.
He added that the company is working with organised informal sector groups and institutional partners to drive enrolment and improve access to timely healthcare services.
Official data from the 2025 State of Health of the Nation Report shows that health insurance coverage in Nigeria increased from 19.2 million people in 2024 to 21.7 million in 2025, representing about 13 per cent of the population.
CIoD said the collaboration aligns with its commitment to strengthening corporate governance and improving service delivery in critical sectors, including healthcare.
By Abigail David
The Nigerian Communications Commission (NCC) says telecommunications operators have compensated more than 75 million subscribers for poor network service, marking one of the largest consumer redress initiatives in Africa’s telecom sector.
The disclosure was made in a communiqué issued after the commission’s 109th board meeting held on May 25, 2026. The compensation followed an NCC directive requiring mobile operators to automatically credit affected customers with airtime for service disruptions and substandard network performance.
According to the regulator, the compensation programme reflects significant progress in enforcing quality-of-service standards across the industry. The NCC, however, said it is independently verifying operators’ claims to ensure that all eligible subscribers receive the compensation due to them.
The commission also reviewed compliance by telecom infrastructure providers, including tower companies, directing them to fully implement network upgrade commitments funded through regulatory fines. It noted that while progress had been made, full compliance remained necessary to improve service quality sustainably.
The NCC identified infrastructure vandalism, growing data demand and limited fibre deployment as key challenges affecting the sector. It added that efforts to expand fibre networks and strengthen telecom infrastructure security are ongoing, including plans for a Communications Industry Security Trust Fund.
Nigeria’s telecom industry invested about N2.13 trillion in network infrastructure in 2025, with operators projecting an additional N1.86 trillion investment in 2026 to expand coverage and improve service delivery.
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