According to the Independent Media and Policy Initiative (IMPI), President Bola Tinubu’s administration’s reforms are responsible for Nigeria’s economy’s recent improvement. IMPI contends that despite the pessimistic outlook presented by certain commentators, the Economy is exhibiting indications of optimism and recovery, as seen by areas such as digital economy, creative industries, and agriculture. This opinion is shared by the Nigeria Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), which commends government initiatives to solve problems and promote economic expansion.
Important reforms are highlighted by IMPI, such as the Infrastructure Support Fund, which was created to lessen the impact of the elimination of gasoline subsidies. There has been no diversion of the money saved due to fiscal restraint. In the period from November 2023 to September 2024, ₦900 billion was saved, and income output grew to ₦9.1 trillion—a notable gain from ₦5.2 trillion the year before. The rise is ascribed to better corporation Tax receipts, especially from nearby businesses. Tax payments have also increased in the Manufacturing sector, which is indicative of the industry’s resilience in production.
One of the most urgent problems facing the nation is inflation.
Foreign capital inflows have increased as a result of the Central Bank of Nigeria’s policies, with a total of $6 billion recorded in the first half of 2024, up from $2.1 billion in 2023. The rise in foreign Investment in the Stock Market is another indication that things are going well. Though these accomplishments are admirable, a number of difficulties still exist. One of the most urgent problems facing the nation is inflation. Nigeria’s Inflation rate reached its highest level in almost twenty years in September 2024, at 26.72%. Because of this, purchasing power has been greatly reduced and the Cost Of Living has increased beyond the reach of many Nigerians.
Household budgets are already under stress due to the substantial increase in fuel and transport prices since the fuel subsidy was eliminated in 2023. A crucial issue that has not received enough attention is unemployment. According to estimates, Nigeria has one of the highest jobless rates in the world as of 2023—33%. While some industries have experienced growth due to reforms, job creation has lagged behind, resulting in a considerable number of people, especially youth, without permanent employment possibilities.
Fiscal sustainability is pressurized due to an increase in external debt.
Although Revenue growth and fiscal restraint are encouraging, independent economists contend that they are insufficient to address the fundamental structural problems with Nigeria’s economy. PwC Nigeria economist Dr. Andrew Nevin notes that in order to establish a more equitable and sustainable economic model, the nation need more extensive reforms in education, Electricity infrastructure, and governance. He adds that despite efforts at diversification, Nigeria’s reliance on oil earnings is still vulnerable because the country’s economy is still greatly impacted by changes in oil prices throughout the world.
In the first half of 2024, Nigeria’s GDP expanded by 3.75%, however this development was uneven across sectors, according to the National Bureau of Statistics (NBS). While the oil industry, which continues to be vital to Nigeria’s ability to generate income, shrank by 6.7%, the agriculture sector expanded by 2.8% overall. The entire economic climate is still precarious despite advancements in non-oil sectors because of these contradictory findings. The fiscal Sustainability is also under pressure due to an increase in external debt. The public debt of Nigeria increased from $83 billion in 2022 to $102 billion by the middle of 2024.
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Additionally, the government’s efforts to create infrastructure are commendable, but experts caution that if this amount of debt is not handled wisely, it might become a problem, particularly given the rising interest rates in the world recently. Significant advancements in tax collection, foreign investments, and fiscal management have resulted from the Tinubu administration’s reforms; but, more fundamental issues still need to be addressed. Continued economic challenges include high unemployment, high inflation, and a dependency on oil earnings. It will take more reforms to solve these fundamental concerns if Nigeria is to attain inclusive and sustained growth. To ensure the long-term viability of the current policy path, independent experts stress the significance of broader economic changes in infrastructure, governance, and human capital development.