Nigerians Push Back Hard Against IMF Recommendation to Tax Petroleum and Telecom Services

At the centre of the latest controversy is the IMF's Article IV Consultation Report on Nigeria, which recommended that the government impose higher taxes on petroleum products and telecommunications services as part of broader efforts to boost government revenue and fund social and development spending.

The Nigerian government moved quickly to distance itself from the recommendation.

In an official statement, Nigerian authorities clarified that the IMF's suggestions are not government policy and carry no binding authority over sovereign tax decisions.

"The IMF Article IV Consultation Report contains the Fund's assessment of Nigeria's economy as well as recommendations for consideration by the authorities. Those recommendations do not amount to government policy and are not binding on Nigeria. Decisions on tax matters are taken through established constitutional and legislative processes and are guided by national priorities and prevailing economic realities," the statement read.

That clarification has not significantly calmed the public reaction. Partly because the denial, while reassuring in isolation, does not prevent the recommendation from circulating as a fear, and partly because Nigerians have a specific and well-founded historical relationship with IMF counsel that makes the mere suggestion feel threatening.

The IMF Nigeria tax recommendation on petroleum and telecoms landed in a country where over 140 million people live below the poverty line, petrol costs above N1,200 per litre, commercial lending rates have exceeded 35 percent, and Nigerians already pay some of the highest data prices in the world.

Dele Oye, chairman of the Alliance for Economic Research and Ethics, was among those who pushed back forcefully. His argument was not simply that the taxes would hurt. It was that they are unnecessary.

He pointed to Nigeria's own revenue trajectory as evidence: tax receipts grew by more than 180 percent between 2022 and 2025, rising from N10.1 trillion to N28.3 trillion. That kind of growth, he argued, demonstrates that Nigeria can increase revenue without adding new burdens to already struggling citizens and businesses.

Oye also described what he called the hidden taxes that Nigerian businesses already bear: erratic power supply, multiple levies across government levels, foreign exchange volatility, high security costs, and borrowing rates that make financing expansion nearly impossible.

"Such taxes would be callous and would further impair enterprises," he said, warning that new levies on petroleum and telecoms could deter investment and slow economic growth at exactly the wrong moment.

Lagos tax lawyer Bolu Oyeniyi brought a more technical perspective, pointing to something the IMF's own report apparently acknowledges: that administrative reforms to existing tax collection could produce gains comparable to those anticipated from new tax measures.

His argument was straightforward. If you can generate the same revenue by collecting what is already owed more efficiently, why add new taxes on people who are already struggling?

He outlined a set of alternatives he believes the government should pursue instead:

• Improve tax compliance and close collection gaps
• Reduce the cost of governance
• Stop revenue leakages across government
• Formalise more of the informal sector
• Review tax incentives currently enjoyed by large businesses and extractive industries

On the specific sectors targeted by the IMF recommendation, Oyeniyi was direct about the downstream risks. Higher petroleum taxes would raise transportation costs and food prices. Taxing telecoms would set back financial innovation and digital inclusion in a country still building out its digital economy.

"The patient needs recovery time, not another surgery," he said.

The most historically charged contribution came from Lanre Adebowale, a civil servant with the Lagos State Ministry of Commerce, who drew a direct line from the current IMF recommendation to the Structural Adjustment Programme imposed on Nigeria under General Ibrahim Babangida's military government in 1986.

"I remember very well how the Babangida government destroyed Nigeria through borrowing from the IMF. One of the conditions for getting the loan then was for the government to implement an economic policy called the Structural Adjustment Programmes. This was the genesis of Nigeria's economic crisis, which we are still struggling with till date," he said.

He recalled how SAP's elements, currency devaluation, privatisation, public spending cuts, market liberalisation, and tax reforms, led to the sell-off of state enterprises including NITEL, Nigeria Hotels, and Nigeria Airways at what he described as giveaway prices to well-connected buyers.

"It is the same IMF that has come again to recommend that our government should tax Nigerians again on petroleum products and telecommunications service," he said.

That framing, the IMF as a recurring character in Nigeria's economic difficulties rather than a neutral adviser, is not unique to Adebowale. It reflects a widely shared reading of Nigerian economic history that is emotionally powerful and, in significant ways, historically grounded.

Whether every consequence of SAP can be laid entirely at the IMF's door is a question economists debate. What is not debatable is that the programme produced real suffering that many Nigerians lived through, and that the institutional memory of that suffering shapes how any new IMF recommendation is received today.