Economy
Nigerians Resist IMF Proposal for Higher VAT, Telecom Tax
By Adedapo Adesanya
Nigerians have kicked against suggestions by the International Monetary Fund (IMF) to the federal government to consider increasing the Value Added Tax (VAT) rate and introducing excise duties on telecommunications services as part of efforts to boost revenue generation and create fiscal space for development spending.
IMF, in its 2026 Article IV Consultation Report on Nigeria, warned that despite recent tax reforms, additional revenue measures would likely be required over the medium term to support critical social and infrastructure spending.
According to the IMF, Nigeria’s revenue mobilisation efforts must go beyond administrative improvements to address the country’s persistently low revenue-to-GDP ratio and rising expenditure pressures.
The Fund stated that, “Further tax policy changes will likely be needed, such as increasing the VAT rate, extending VAT to fuel products, rationalising tax expenditures in particular VAT exemptions on extractive industries and some customs duties, and introducing telecom excises, to complement administrative gains.”
It noted that while the recently enacted tax reforms are expected to improve revenue collection over time, some of the measures are revenue-reducing in the short term and may take time to yield significant gains.
On X (formerly Twitter), user @RealCeecee wrote – “You want to impose more suffering on people living on empty pockets. Where exactly does all this revenue go to? IMF would never give this kind of advice to any country that has good leaders, when the masses are already going through extreme suffering.”
“To be honest Nigerian need to stand its feet against the IMF, no be anything them go detect for us. The revenue they are talking about has anyone seen where it goes, let alone imposing another way to generate that will actually cause discomfort for Nigerians,” another handle, @KingMasy, wrote.
The IMF had stressed that continued revenue mobilisation is essential if the government is to sustain higher capital spending and expand social intervention programmes aimed at cushioning the impact of economic reforms on vulnerable Nigerians.
“Over the medium term, continued revenue mobilisation is essential to creating fiscal space for development and social spending,” the Fund said, adding that there was limited room to maintain the projected increase in capital expenditure without additional revenue sources.
The Bretton Woods institution, however, cautioned that the timing of any new tax measures should take into account the worsening poverty and food insecurity situation in the country.
It emphasised that any tax increases should be accompanied by a fully funded and effective cash transfer programme to shield vulnerable households from additional economic hardship.
“The timing of reforms must consider the poverty and food insecurity situation and ensure that the cash transfer system is in place and funded,” the report stated.
The IMF’s recommendation comes as Nigeria continues to grapple with weak revenue generation despite recent reforms, including the removal of fuel subsidies and efforts to improve tax administration.
The Fund projected that poverty and food insecurity could worsen amid higher global fuel and food prices, noting that poverty had already reached 63 per cent of the population while about 27 million Nigerians faced food insecurity in 2025.
It also reiterated its call for a neutral fiscal stance in 2026, warning that spending pressures linked to poverty, food insecurity and preparations for the 2027 general elections could widen fiscal deficits and increase financing needs if not carefully managed.
By Adedapo Adesanya
The National Bureau of Statistics (NBS) has revealed that Nigeria’s headline inflation rate in May 2026 rose to 15.93 per cent from 15.69 per cent in April, as the pressure from the Iran war continued to affect the global economy.
In the report on Monday, the statistical office showed that the headline inflation rate for May on a month-on-month basis was 1.75 per cent. 0.39 per cent lower than the 2.13 per cent recorded in April 2026.
On an annualised basis, the print was down from 26.06 per cent in the same month of the preceding year (May 2025). This was due to the rebasing of the calculation year from 2009 to 2024.
The rise in prices, which stemmed from the continued conflict in the Middle East, continued to stoke food prices and energy costs, which account for a huge chunk of average spending.
According to the NBS, “this can be attributed to the rate of change in the average prices of the following products: Millet whole grain, yam flour, ginger (Fresh), beef, garri, tam tuber, pepper (Fresh), cray fish, cassava tuber, Beans, Irish Potatoes, tomatoes (fresh), wheat grain (Sold loose), soya beans, guinea corn, plantain, carrots (Fresh) etc.”
The Food inflation rate in May 2026 on a month-on-month basis was 2.98 per cent, down by 0.65 percentage points from April 2026 (3.63 per cent), while on a year-on-year basis, it was 16.96 per cent and stood at 24.55 per cent in the same month of the preceding year (May 2025).
In its recent assessment of Nigeria, the International Monetary Fund (IMF) acknowledged the country’s ongoing macroeconomic reform efforts while warning that rising inflation, deepening poverty, and external shocks linked to geopolitical tensions could undermine recent gains.
The IMF projected a reversal in the disinflation trend, with headline inflation rising from 15.1 per cent in February 2026 to 15.4 per cent in March, driven largely by food price increases. It projected year-end inflation of 17.0 per cent, citing global commodity shocks and domestic pass-through effects.
The lender also recommended that the Central Bank of Nigeria maintain a cautious, data-dependent monetary policy stance following its recent steadying of interest rates at 26.5 per cent.
By Adedapo Adesanya
The Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri, has said ongoing reforms and strategic policy implementation in Nigeria’s petroleum sector are driving significant investments and strengthening the country’s position as a leading energy destination in Africa.
Mr Lokpobiri stated this at the Management Retreat of the Ministry of Petroleum Resources, where he stressed the need for improved institutional performance and accountability to sustain growth in the sector.
According to the Minister, the federal government has deliberately pursued far-reaching reforms aimed at creating a stable and investor-friendly environment capable of attracting local and foreign capital into the oil and gas industry.
“From far-reaching institutional reforms to the effective implementation of strategic policies, we have remained committed to carrying all stakeholders along, fostering a conducive environment for investments to flourish,” Mr Lokpobiri said.
“As a result, our petroleum sector has witnessed significant investments that continue to strengthen Nigeria’s position as a leading energy destination.”
The Minister noted that the gains recorded in the sector were the product of collective efforts across the Ministry and its agencies, commending staff for their dedication and professionalism.
“The Management Retreat of the Ministry of Petroleum Resources provided an important platform to reiterate that these accomplishments would not have been possible without the collective dedication, professionalism and teamwork of every staff member across the Ministry and its agencies,” he stated.
Mr Lokpobiri said the retreat, themed Driving Institutional Performance and Accountability in the Petroleum Sector for Sustainable National Development, underscored the importance of continuous improvement in service delivery and operational efficiency.
Drawing lessons from the theme, he urged officials of the Ministry and regulatory agencies to intensify efforts toward enhancing institutional effectiveness and strengthening governance frameworks.
“I encouraged that we must redouble our efforts, continuously improve the quality of our services, and strengthen institutional performance,” he said.
The Minister further emphasised the continued relevance of fossil fuels in the global energy mix, stressing that Nigeria must leverage its hydrocarbon resources to drive economic growth while ensuring citizens benefit from ongoing reforms.
“With fossil fuel as the dominant source of energy, we must ensure that Nigerians experience the benefits of our progress and that Nigeria remains the preferred investment destination in Africa and a globally competitive hub for energy investments,” Mr Lokpobiri added.
By Aduragbemi Omiyale
The N3.2 billion rights issue of Universal Insurance Plc has been extended by almost two weeks after securing regulatory approval.
The exercise was earlier scheduled to close on June 10, 2026, but will now close on Monday, June 22, 2026.
The extension was granted by the Securities and Exchange Commission (SEC) after a request from the underwriting organisation.
In the rights issue, Universal Insurance is offering to shareholders 2,666,666,667 ordinary shares of 50 Kobo each at N1.20 per share on the basis of one new ordinary share for every existing six ordinary shares held as of the close of business on Monday, March 30, 2026.
Subscription for the acquisition of the company’s extra shares opened on Wednesday, May 13, 2026.
The extension gives investors more time to increase their stake in the insurance firm, which intends to use proceeds from the exercise to boost its capital base, as mandated by the National Insurance Commission (NAICOM).
Insurance companies operating in Nigeria have been given till July 31, 2026, to shore up their capital base or pack up. Operators can also explore a merger if they wish.
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