The Chief Executive Officer of Financial Derivatives, Bismarck Rewane, a renowned economist, has foretold that Nigeria will not be able to reach President Bola Ahmed Tinubu’s $1 trillion economic ambition in the next four to five years. Rewane, who recently mentioned this in an interview on Arise TV, explained that Nigeria’s GDP, which increased by 3.19 percent in the second quarter of 2024, is growing too slowly to meet the $1 trillion economic target. The economist observed that despite Nigeria’s tax-to-GDP rising from approximately 4% to 9%, the country’s citizens’ standard of living has not improved.
He continued by saying that Nigeria’s Economy was struggling from global economic downturns. Rewane bemoaned the fact that Nigeria, which made a commitment to move into the top 20 global economies list, currently stands at number 32, having previously ranked 26th. It is worth remembering that during last year’s 29th Nigerian Economic Summit, President Tinubu gave a positive assessment of Nigeria’s economic prospects, saying that double-digit inclusive and sustainable growth will enable the country to reach its economic target of $1 trillion by 2026 and $3 trillion within the same decade.
Several critical economic reforms were carried out.
Tinubu claimed that his administration’s Renewed Hope Agenda can create a trillion-dollar economy in the next ten years by utilizing the resources and population of the country, with a primary focus on maximizing Nigeria’s economic strength. The incumbent president inherited a deteriorating economy with poor power supplies, high debt stock, little foreign exchange, nearly two decades of high inflation, and declining oil production as a result of Crude Theft and underinvestment. Regardless, he promised to address widespread Insecurity and boost the economy by at least 6% annually, as well as remove obstacles to investment, create jobs, and stabilize the exchange rate.
Working towards this pledges upon assumption into office, the Tinubu’s administration carried out several critical economic reforms, including eliminating Fuel Subsidies and standardizing foreign exchange rates. But these actions had immediate repercussions, which included rising oil costs and a significant decline in the value of the Naira. Together, these occurrences increased the financial strain on people and businesses. These broad policy changes have primarily affected Nigerians and have contributed to the rising cost of living.
Government increased taxes on the financial services.
Mixed reactions were observed on the various reforms implemented under President Bola Tinubu throughout the past year, particularly the economic reforms that have forced the majority of Nigerians into greater financial hardship, as the administration continues its tenure in office. In response, the federal government increased taxes on the financial services industry and turned to internal resource development in an effort to lessen this impact. These steps are unlikely to make up for the losses suffered, though, given the initial indications like the downturn in economic activity, which fell from 3.4% in Q4 2023 to 2.98% in Q1 2024.
According to data from Statista, the country’s Gross Domestic Product value is estimated at $374.95 billion in 2023 and $252.74 in 2024, a far cry from the $1 trillion economy that President Tinubu is committed to. The data also project GDP to reach $287.85 billion by 2029. Compared to other developing markets and global average, Nigeria’s GDP per capita as of 2024—estimated to be between $2,400 and $2,500—is comparatively low, indicating serious problems with economic development, income distribution and poverty.
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As President Tinubu rules on in his second year in office, his administration is consider to encounter numerous challenges. This year is not likely to see a decline in the social pessimism or the severe expense of living crisis observed last year. The IMF predicts that by the end of the year, Inflation would drop to 26%, although this is still dependent on falling prices for food and gasoline. Theoretically, Nigeria should become self-sufficient in Petroleum products when commercial operations at the Dangote and Port Harcourt refineries begin later this year. But in order to reduce inflationary pressures, these facilities will have to produce consistently in accordance with the demands of the domestic market.