The World Bank's Nigeria Development Update for June 2023 highlights the historic PMS subsidy and FX reforms in Nigeria, which are expected to save NGN 3.9 trillion in 2023 alone and prevent the country from falling into a fiscal crisis. These reforms pave the way for a new upward trajectory of investment, growth, and development. However, the report also notes that the reforms will have significant but temporary inflation impacts, and recommends providing timely, temporary, and targeted assistance to poor and vulnerable households through cash transfers. The report further suggests formulating and communicating a new compact around restoring fiscal sustainability, supporting poor and vulnerable households, spending better on development priorities, and sustainably spending more through revenue mobilization. Finally, the report recommends continuing reforms in FX, monetary, and fiscal policies to entrench macroeconomic stability and faster growth.
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