STILL COOKING WITH A FAILED RECIPE A review of IMF country advice on social spending, public services, debt, tax and gender equality

PRESS RELEASE

ActionAid exposes IMF double standards as frozen public sector wage bill stagnates for six years.

• Nigeria has spent just 1.9% of GDP on its public sector wage bill for six consecutive years, far below the African regional average of 7.6% and the global average of 9%, yet the IMF has not advised an increase.
• The IMF advised Nigeria to double its VAT rate from 7.5% to 15% by 2026, a measure a new international report describes as clearly regressive, while offering no equivalent push for higher taxes on the wealthiest earners.
• The report finds the IMF’s own documents acknowledge that compensatory measures for the poor were not scaled up in time when Nigeria removed its fuel subsidy in 2023, a removal the government was later forced to partially reverse.
• While the United Kingdom is encouraged to expand public sector investment, Nigeria and other lower-income countries are advised to keep wage bills frozen, a pattern the report says exposes the IMF’s rhetoric of reform as largely unchanged from the era of structural adjustment.

Abuja, 23 June 2026: ActionAid international in collaboration with ActionAid Nigeria, Education International, the Tax and Education Alliance and partners has found that International Monetary Fund (IMF) policy advice to Nigeria has remained largely unchanged in substance despite the institution’s public commitments to social spending and gender equality. The report, Still Cooking with a Failed Recipe: A review of IMF country advice on social spending, public services, debt, tax and gender equality, examined 29 IMF documents across 11 countries, including Nigeria, covering the period February 2022 to February 2025.

The report finds that Nigeria’s public sector wage bill has remained frozen at 1.9% of GDP for six consecutive years, the lowest figure recorded among the 11 countries studied and well below both the African regional average of 7.6% and the global average of 9%. Despite this chronic underspending, the IMF’s country documents contain no recommendation to increase the wage bill. The report contrasts this with the United Kingdom, which spends 15.9% of GDP on its public workforce and is encouraged by the IMF to expand public investment further.

On tax policy, the report highlights that the IMF advised Nigeria, through its 2024 Article IV Consultation and an earlier Selected Issues paper, to double its Value Added Tax rate from 7.5% to 15% by 2026, bringing it in line with the average across the Economic Community of West African States. The report describes this package, taken together with advice to raise excise duties on tobacco and alcohol, as clearly regressive in its overall effect, since it places a proportionately heavier burden on lower-income households without a corresponding push to raise rates on the highest earners, who remained taxed at just 24%.

The report also documents contradictions in the IMF’s corporate tax advice to Nigeria. While one IMF assessment flagged Nigeria’s revenue intake as among the lowest in the world, a separate IMF paper recommended lowering corporate tax rates further to improve competitiveness, even though Nigeria’s rates were already close to the regional average.

On the 2023 removal of Nigeria’s fuel subsidy, the report cites the IMF’s own assessment that adequate compensatory measures for the poor were not scaled up in a timely manner, and that the resulting pressure on households contributed to the government later reinstating a measure of subsidy to ease cost-of-living pressures. The report notes that the IMF continues to encourage the government to pursue subsidy reform alongside a communication strategy aimed at securing public buy-in, rather than addressing the underlying adequacy of social protection.

The report further finds that IMF documents on Nigeria included some sex-disaggregated data but no substantive gender analysis of how its fiscal advice would affect women and girls, a gap consistent with the report’s wider finding that gender considerations remain largely tokenistic across the 11 countries reviewed.

“For six years running, the IMF has looked at a wage bill that funds Nigeria’s teachers, nurses and doctors at less than a quarter of the regional average, and found nothing to recommend beyond keeping it frozen. Meanwhile, ordinary Nigerians are being asked to absorb a doubling of VAT and the lingering effects of a poorly cushioned subsidy removal. This is not the advice of an institution that has reformed. It is the same recipe, repackaged,” said Andrew Mamedu, Country Director, ActionAid Nigeria

The report calls on the Nigerian government to resist further wage bill freezes that undermine the delivery of essential public services, and to ensure that any future tax reform is preceded by a genuine distributional and gender impact assessment, rather than being driven primarily by IMF revenue targets. It also calls for stronger parliamentary scrutiny of fiscal commitments made in IMF consultations, so that decisions affecting public sector pay and taxation are subject to democratic oversight rather than being negotiated solely between technical officials.

ActionAid, Education International, the Tax and Education Alliance and co-sponsoring organisations are calling for the IMF to be replaced by a fairer multilateral architecture, including a UN Tax Convention and a UN Convention on Sovereign Debt, that would allow countries like Nigeria to set fiscal policy according to their own development priorities rather than externally imposed austerity benchmarks.

/ENDS//

Notes to editors

The full report, Still Cooking with a Failed Recipe: A review of IMF country advice on social spending, public services, debt, tax and gender equality, is based on an analysis of 29 IMF documents covering February 2022 to February 2025 across 11 countries: Brazil, Ghana, Kenya, Malawi, Nepal, Nigeria, Senegal, Uganda, the United Kingdom, Zambia and Zimbabwe. The report is published by ActionAid, Education International and the Tax and Education Alliance, and co-sponsored by Afrodad, Akina Mama wa Africa, APMDD, Bretton Woods Project, CESR, Debt Justice, EndAusterity Campaign, FEMNET, Global Alliance for Tax Justice, Global Social Justice, IBON International, ITUC, Latindadd, MENAFEM, Public Services International, Tax Justice Network, Third World Network and WEDO.

ActionAid Nigeria, a social justice non-governmental organisation working to eradicate poverty and all forms of injustice in Nigeria. We are an affiliate member of the ActionAid International Federation with a presence in 45 countries. AAN works in solidarity with people living in poverty and exclusion to achieve social justice, gender equality, and poverty eradication towards achieving a just, equitable, and sustainable world in which every person enjoys the right to a life of dignity, freedom from poverty and all forms of oppression. 

Contact:

Oluwakemi Akinremi-Segun | Communications Coordinator | ActionAid Nigeria

Tel: +234 (0) 809 207 6904 | +234 (0) 812 888 8826  Email:Oluwakemi.AkinremiSe@actionaid.org | Info.nigeria@actionaid.org