ActionAid International has criticised the International Monetary Fund (IMF), arguing that its policy prescriptions have left Nigeria and several other developing countries struggling with heavy debt obligations at the expense of essential public services.
The criticism follows the release of a new report reviewing IMF policy advice issued to 11 countries over a three-year period. The organisation contends that rising debt repayments are consuming resources that could otherwise be directed towards healthcare, education and social protection programmes.
According to the report, Nigeria currently channels a substantial portion of its revenue into servicing external debts, far exceeding allocations to key sectors such as health and education. ActionAid warned that this trend is limiting the country’s ability to improve public services and address growing economic pressures.
The organisation noted that debt servicing has become a major challenge across many African nations, with governments increasingly prioritising creditor payments over investments in citizens’ welfare.
It stated, “In 2025, seven of the eight African countries studied spent more on servicing their debts than on health – and six more than double. Only Ghana and Zimbabwe managed to spend more on education than they do on debt servicing. The scale of the debt burden relative to social spending is stark.”
ActionAid argued that despite these realities, IMF assessments often fail to adequately consider how debt repayments affect spending on critical sectors.
“The IMF did not connect debt to social spending. Across all eight African countries studied, no IMF document compared external debt payments against health or education spending or evaluated the policy trade-offs, despite debt servicing exceeding health spending in seven of the eight African countries,” it said.
The report further stated that debt repayment was treated as “an unalterable reality”, with countries expected to allocate resources to social services only after paying creditors.
The group also revisited Nigeria’s fuel subsidy removal policy, claiming that support measures introduced to cushion the impact on vulnerable citizens were insufficient to offset the resulting economic hardship.
“The IMF recommended in ArtIV24 that Nigeria remove its fuel subsidy,” the report stated, adding that “adequate compensatory measures for the poor were not scaled up in a timely manner.”
ActionAid maintained that the economic strain experienced after the subsidy removal demonstrated the need for stronger social safety nets before implementing major fiscal reforms.
The report further criticised what it described as the IMF’s approach to public-sector spending in Nigeria, noting that government expenditure on workers has remained low despite staffing needs in critical sectors such as health and education.
Speaking on the findings, ActionAid Nigeria Country Director Andrew Mamedu accused the IMF of applying policies that place excessive burdens on ordinary citizens.
“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,” Mamedu said.
The report also questioned recommendations supporting higher taxes, including an increase in VAT, arguing that such measures disproportionately affect low-income households.
ActionAid concluded by calling for a reassessment of the IMF’s role in addressing debt crises, insisting that the institution’s current approach has not delivered meaningful reforms.
It added, “The IMF may claim that it is not ‘your grandmother’s IMF’ but, in its core practices and ideology, it is unreformed. With its outdated mindset and lack of understanding of gender equality, it is not fit for purpose. It is time for the IMF to be retired, not reformed.”