The IMF has barely finished publishing its tax recommendations before Nigeria's most prominent private sector policy group has pushed back, warning that taxing fuel and telecoms in the current environment is not reform. It is recklessness.
Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), has responded to the IMF's 2026 Article IV Consultation recommendations, saying the organisation welcomes the positive assessment of Nigeria's economic reforms but warns against pressures that will affect the livelihoods of citizens. "The next phase of economic management should therefore focus on converting macroeconomic gains into welfare gains. The challenge before policymakers is no longer merely one of economic stabilisation; it is increasingly one of prosperity."
The recommendations drawing the sharpest opposition are the IMF's calls to extend VAT to fuel products and introduce excise duties on telecommunications services. Telecom operators warned that the industry was already facing multiple taxes, rising energy costs, foreign exchange pressures, and infrastructure challenges, warning that any additional burden would eventually be passed on to consumers through higher call and data charges. Similarly, proposals relating to fuel taxation have faced resistance from labour unions and private sector groups amid concerns over rising living costs following the removal of petrol subsidies and increases in transport and food prices.
The numbers make the concern concrete. Nigeria's telecom sector already shoulders more than 39 different taxes, a 7.5% VAT, and a mandatory 2% contribution of annual revenue to the NCC, even before any new excise duty is introduced. Meanwhile, petrol prices already stand at approximately ₦1,532.93 per litre following the removal of fuel subsidies in 2023, and any VAT application would add a further percentage directly to that figure.
The inflationary arithmetic is unfavourable. The IMF itself acknowledged that while a potential increase in export revenues and fiscal inflows due to more favourable world commodity prices might help reduce inflation, the same dynamics might simultaneously increase the cost of food. Layering a fuel VAT on top of that dynamic would amplify rather than neutralise the inflationary pressure.
The IMF stressed the need for an effective and adequately funded cash transfer system to cushion vulnerable households before implementing such reforms, a sequencing condition that Nigeria's current social protection architecture is far from meeting at the scale required. With poverty at 63% of the national poverty line and 27 million Nigerians facing food insecurity, the cash transfer infrastructure that would need to precede these taxes does not yet exist in any meaningful form.
The public reaction has been scathing in places, with some commentators invoking comparisons to the Structural Adjustment Programme of the 1980s, a period of IMF-backed reforms that remains a byword in Nigeria for policies that prioritised fiscal metrics over human welfare.
The CPPE's warning lands at the precise intersection of Nigeria's reform dilemma: the government needs more revenue, the IMF has identified where it should come from, and the groups who would pay those taxes are the ones least able to absorb another cost increase. Abuja's response to that triangle will define the political economy of the second half of 2026.
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