IMF Urges Nigeria to Strengthen Cash Transfers Amid Rising Food and Energy Prices

The International Monetary Fund (IMF) has urged Nigeria to strengthen targeted cash transfer programmes for vulnerable households as rising food and energy prices continue to put pressure on living standards and household purchasing power.

Deniz Igan, Division Chief in the IMF's Research Department, made the call during a press conference on the World Economic Outlook in Bangkok, Thailand, on Tuesday.

Igan said expanding targeted financial assistance would help alleviate poverty and improve food security, while emphasising the importance of balancing immediate household needs with long-term fiscal stability.

She noted that Nigeria's economy had remained resilient, partly owing to its position as an energy exporter, despite persistent poverty and declining household purchasing power.

According to Igan, temporary income support measures should be complemented by improvements in public expenditure management and stronger domestic revenue collection.

She explained that these measures would enable governments to address the rising cost of essential goods and services without compromising medium-term fiscal sustainability.

Igan stressed the importance of ensuring that financial assistance reaches households most affected by inflation and rising living costs, particularly those struggling to afford food, energy and other basic necessities.

Meanwhile, Silvana Tenreyro, Director of the IMF's Research Department, warned that the resilience demonstrated by the global economy was approaching its limits.

Tenreyro urged governments to move beyond short-term crisis management and adopt policies aimed at strengthening economic stability and resilience against future shocks.

She identified rebuilding fiscal buffers and strengthening supply chains, particularly in critical sectors such as energy, as essential measures for protecting economies against global uncertainties.

The IMF official also advised central banks to adopt a balanced approach when responding to oil price shocks, taking into consideration the need to control inflation while sustaining economic activity.

According to Tenreyro, monetary policy decisions should reflect prevailing inflation rates, labour market conditions and the underlying causes of economic shocks.

She explained that a carefully considered policy response would help governments and monetary authorities manage inflationary pressures without unnecessarily weakening economic growth.

Tenreyro further called for stronger fiscal frameworks and more resilient supply chains to enable countries to withstand future economic disruptions.

The IMF's recommendations underline the importance of combining targeted social protection measures with sound fiscal management, particularly as rising food and energy costs continue to affect vulnerable households.