Business

IMF Warns Against Costly Interventions Amid Food Inflation

Published

1 month ago

June 3, 2026

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.

Business

CBN Orders Banks to Freeze Accounts Linked to Terrorism Financing Suspects

Published

3 weeks ago

June 25, 2026

Online editor

By Abigail David

ABUJA — The Central Bank of Nigeria (CBN) has directed banks, Payment Service Banks and other financial institutions to immediately freeze the accounts and assets of individuals and entities designated for terrorism and terrorism financing.

The directive was contained in a circular dated June 24, 2026, issued by the apex bank’s Compliance Department to all institutions regulated under the Banks and Other Financial Institutions Act (BOFIA) 2020.

According to the CBN, the action follows updated sanctions issued by the Nigeria Sanctions Committee and the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) under Executive Order 13224, as amended.

The regulator said the updated Nigeria Sanctions List, released on June 18, 2026, contains binding measures that require immediate implementation by all regulated entities.

Six individuals named on the sanctions list are Muktar Muhammad Adamu, Babangida Muhammed Adamu Hammajam, Abdullahi Umar Usman, Ibrahim Abubakar, Adamu Chiroma and Yakubu Ogirima Ibrahim.

The CBN also identified four Bureau de Change operators allegedly owned or controlled by the designated individuals. They include Generation Currency Bureau de Change Limited, Manhattan Bureau de Change Limited, Nine to Nine Exchange Bureau de Change Limited and Abbal Bako & Sons Bureau de Change Limited.

As part of the directive, financial institutions were ordered to screen customers, beneficial owners and all transactions against the updated sanctions list and immediately freeze, without prior notice, all funds, assets and economic resources linked directly or indirectly to the designated persons and entities.

The apex bank further instructed institutions to prevent the provision of funds, financial services or economic resources to the sanctioned individuals and organisations.

Banks were also directed to file Suspicious Transaction Reports with the Nigerian Financial Intelligence Unit (NFIU) for any confirmed or attempted matches and submit compliance reports to the CBN within 48 hours, detailing actions taken and any assets frozen. Institutions with no matching accounts were required to file nil returns.

In addition, the CBN urged financial institutions to strengthen monitoring systems for terrorism-financing indicators, including unusual fund movements, the use of money service businesses, bureaux de change and transactions involving high-risk jurisdictions.

The regulator warned that false or misleading compliance reports would attract sanctions under BOFIA 2020 and other applicable laws, adding that it would conduct supervisory reviews and examinations to ensure full compliance.

The directive takes immediate effect.

Business

Dangote Refinery Cuts Petrol Gantry Price by N75 Per Litre

Published

4 weeks ago

June 16, 2026

Online Editor

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.

Business

Ultimate Health Pushes Affordable Insurance for Nigeria’s Informal Sector

Published

1 month ago

June 12, 2026

Online Editor

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.