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
Apple will change how third-party apps seek users’ consent for personalised advertising on iPhones and iPads after Germany’s competition regulator raised concerns about the company’s treatment of competing apps.
The Bundeskartellamt said Apple had offered binding commitments to address the concerns, bringing its competition investigation to an end.
The regulator said Apple’s App Tracking Transparency framework required third-party app providers to obtain additional consent through Apple-designed prompts for certain types of cross-company data use. However, the requirements did not apply in the same way to Apple’s own services.
Bundeskartellamt President Andreas Mundt said Apple could provide strong privacy protections, but its rules should not give its own products an advantage over competitors.
Under the new commitments, Apple will make consent prompts for its own services and third-party apps more similar. It will also remove wording and symbols that could discourage users from granting consent to third-party apps.
App developers will have greater flexibility to combine Apple’s consent requests with those required under data protection laws, provided the process remains clear to users.
The regulator stressed that the changes are not intended to increase consent rates for personalised advertising but to ensure users can make free and informed choices.
Apple has four months to implement the changes. The commitments will remain in force for seven years and will be monitored by an independent trustee.
The investigation began in June 2022 after the regulator found Apple held a position of paramount significance across markets. Germany’s Federal Court of Justice confirmed the finding in March 2025.
By Abigail David
The Nigerian National Petroleum Company Limited (NNPC Ltd) has deployed more than 1,000 young professionals into its workforce following the successful completion of a one-year internship, training and evaluation programme.
The Group Chief Executive Officer of NNPC Ltd, Bayo Ojulari, announced the development in a post shared on the company’s official social media platforms, describing it as a significant milestone for the national energy company.
According to Ojulari, the new employees were selected after completing a rigorous programme that combined practical internships, intensive training and performance assessments.
He said the recruitment process reflected the company’s commitment to merit-based employment, stressing that competence and performance, rather than personal connections or background, determined successful candidates.
Ojulari noted that while the participants initially joined the organisation through offer letters, their permanent deployment was earned through consistent performance during the internship period.
He encouraged the newly deployed employees to contribute innovative ideas, take ownership of their professional development and actively support the company’s growth.
The NNPC chief also urged them to remember the opportunities they had received and, in the future, help create similar opportunities for others.
The deployment is part of NNPC Ltd’s ongoing efforts to strengthen its workforce and build capacity following its transition into a commercially driven national energy company under the Petroleum Industry Act.
The recruitment exercise began in July 2024 during the tenure of former Group Chief Executive Officer Mele Kyari.
Billionaire businessman Femi Otedola has increased his ownership in First HoldCo Plc after acquiring an additional 1.77 billion shares through his investment company, Calvados Global Services Limited.
According to a regulatory filing on the Nigerian Exchange (NGX), the transaction, valued at N222.20 billion, was completed on Thursday.
The latest purchase raises Otedola’s shareholding from 9.99 billion shares to 11.77 billion shares, increasing his stake in the financial institution from 21.96 percent to 25.88 percent.
The acquisition follows another major investment made on July 22, when Otedola purchased 706.13 million shares worth N77.58 billion, further strengthening his position as the bank’s largest shareholder.
With the latest transaction, his total investment in First HoldCo is now estimated at approximately N1.47 trillion, making him the institution’s single largest investor.
Under the Investments and Securities Act and the Securities and Exchange Commission’s merger and acquisition regulations, any shareholder who acquires 30 percent or more of the voting shares in a publicly listed company is required to make a mandatory takeover offer to other shareholders.
The increased investment comes weeks after First HoldCo became Nigeria’s most valuable listed banking stock by market capitalisation, surpassing Zenith Bank following sustained gains in its share price on the Nigerian Exchange.
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