Nigerian Think Tanks Urge FG to Reject IMF Tax Proposals, Offer Alternative Recovery Plan

Nigeria's federal government has been advised by prominent economic think tanks to reject the International Monetary Fund's (IMF) proposals for additional taxes on fuel and telecommunications. The Alliance for Economic Research and Ethics (AERE) and the Centre for Promotion of Private Enterprise (CPPE) argue that such measures would exacerbate poverty, hinder business growth, and undermine economic recovery efforts.

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The country’s immediate challenge is not insufficient taxation but weak revenue administration, high production costs, revenue leakages and a worsening poverty situation.

Instead of imposing new taxes, AERE and CPPE contend that Nigeria's primary challenge lies in weak revenue administration, high production costs, and significant revenue leakages, coupled with a worsening poverty situation. They presented a seven-point reform agenda aimed at strengthening government finances and boosting revenue generation without placing further strain on citizens.

The proposed agenda includes rejecting new taxes in 2026, enhancing tax administration and compliance, and rationalizing tax expenditures currently enjoyed by extractive industries and large corporations. Additionally, the think tanks advocate for reducing the cost of governance, lowering interest rates to support productive enterprises, expanding social protection programs, and urgently addressing revenue leakages.

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IMF’s support for continuance of monetary tightening without sufficient consideration of the adverse consequences for investment, enterprise growth, job creation and sovereign debt service pressures.

CPPE specifically expressed concern over the IMF's endorsement of continued monetary tightening, arguing it fails to adequately consider the negative impacts on investment, enterprise growth, job creation, and sovereign debt servicing. Both organizations emphasized that development financing remains an economic necessity for Nigeria. AERE highlighted that the IMF's recommendations did not sufficiently account for the country's social realities, particularly the widespread poverty and food insecurity affecting millions.

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These measures offer a more sustainable route to fiscal stability than imposing additional taxes on consumers and businesses already grappling with elevated living costs.