The International Monetary Fund has urged the Federal Government to adopt a stringent public spending program and roll back on subsidies.
The IMF has said that cutting back on subsidies and taming public spending is the best way Nigeria can reverse the economic downturn brought about by tumbling crude oil prices. Around 70 percent of Nigeria’s revenue derives from the sale of crude oil, making the recent slump in global crude oil prices a huge drain on the national coffers.
The IMF’s recommendations comes at a time when Nigeria has exhaustively used a series of austerity measures at cushioning the country against revenue loss brought about the decline in crude oil prices. Some of the measures used before include: surcharges on some luxury goods, reduction in overseas trainings by government officials, voluntary cut in National Assembly budget, reduction of salaries of top government officials and reduction of budgets of state bodies, including State House.
IMF says best way to deal with slump in global crude oil prices is through the removal of subsidies and cutting back on public spending
One long-term solution to commodity price swings that has been repeatedly suggested is diversifying the economy away from oil. IMF Managing Director, Christine Largade, observed that although Nigeria has been trumpeting its efforts to diversify its economy, the impact remains to be seen on the people and the economy in general.