RismadarVoice Reporters, June 17, 2026
Economic experts and capital market operators have advised the Federal Government to exercise caution in adopting recent policy recommendations linked to the International Monetary Fund (IMF), particularly on external borrowing and proposed tax adjustments.
They warned that expensive foreign loans and an increase in Value Added Tax (VAT) could place additional pressure on households and weaken Nigeria’s fragile economic recovery.
Speaking on the issue, Managing Director of Arthur Stevens Asset Management and former President of the Chartered Institute of Stockbrokers, Olatunde Amolegbe, said concerns raised by the IMF regarding the structure of Nigeria’s proposed borrowing arrangements were valid.
He noted that loans backed by significant collateral or future revenue streams could expose the country to long-term fiscal risks and reduce financial flexibility.
Amolegbe stressed that borrowing decisions should be guided by key considerations such as interest rates, repayment terms, and the potential economic value of projects being financed.
On taxation, he cautioned that increasing VAT at a time when citizens are still adjusting to fuel subsidy removal, foreign exchange reforms, and rising living costs could further dampen consumer spending and slow economic activity.
Instead, he recommended widening the tax base, improving compliance, and blocking revenue leakages before considering any upward adjustment in tax rates.
He also observed that while the Central Bank of Nigeria’s tight monetary stance has helped stabilise the exchange rate, overly restrictive policies could limit credit availability and discourage private sector investment.
Amolegbe further supported the IMF’s call for reduced reliance on volatile foreign portfolio inflows, adding that long-term stability depends on strengthening domestic production, expanding exports, and attracting sustainable foreign direct investment.
Similarly, investment banker and Chartered Stockbroker, Tajudeen Olayinka, warned against continued reliance on costly external borrowing, saying such debts could place a heavy burden on future government revenues.
He argued that Nigeria should prioritise concessional financing from multilateral institutions, which typically offer more favourable terms and support long-term development goals.
Olayinka also rejected the idea of increasing VAT under current economic conditions, noting that businesses and households are already struggling with the impact of ongoing reforms.
On monetary policy, he said the Central Bank of Nigeria should maintain its current tightening stance until macroeconomic stability is firmly established.
He further cautioned that sudden reversals of foreign portfolio investments could destabilise the economy and urged greater focus on strengthening productive sectors rather than relying on short-term capital inflows.
Economic analyst and communications expert, Clifford Egbomeade, also weighed in, describing the IMF’s concerns about Nigeria’s proposed $5 billion Total Return Swap arrangement with First Abu Dhabi Bank as significant.
He explained that the structure of the deal, which involves collateral exceeding the borrowed amount, could expose Nigeria to financial risks, particularly in the event of currency depreciation or rising global interest rates.
Egbomeade also criticised any proposal to increase VAT at this time, describing it as an additional burden on already strained households.
He warned that excessive reliance on “hot money” inflows could create a false sense of economic stability without delivering real productive value.
While supporting expanded social intervention programmes, he cautioned that weak targeting mechanisms in Nigeria’s social register could result in inefficiencies and leakages if not properly addressed.
