In 2024, Nigeria exceeded expectations with a substantial surplus of $1.432 billion in its current account balance, as revealed in the most recent report from the International Monetary Fund (IMF). In 2023, there was a surplus of $1.21 billion, but the achievement now shows a significant improvement from that. Nigeria’s Economy saw a boost in its gross national savings and investment, leading to an improvement as stated in the IMF’s World Economic Outlook Database. In 2024, the country saw a rise in its gross national savings, reaching 26.32 percent of its GDP, an increase from 24.61 percent in 2023, as noted in the report.
Also, in the same year, the overall Investment increased to 25.75 percent of the Gross Domestic Product, which was higher than the 24.28 percent recorded in the previous year. The current account balance of a nation reflects all of its economic interactions on the global stage, encompassing factors such as Trade balance, net income, direct transfers, and asset income. This balance is a reflection of the relationship between what is exported and imported, the income that is earned and paid, and the changes in assets.
This positive trajectory might persist, providing a boost to the economy.
If one’s balance is positive, it means they are lending more than they are borrowing. On the other hand, a negative balance indicates that they are borrowing more than they are lending. According to recent IMF data, Nigeria’s economy is projected to experience growth and stability in the near future, showing signs of a flourishing economy with a rise in both investment opportunities and savings rates. It is anticipated that this positive trajectory will persist, providing a boost to the economy and ensuring stability in the region.
However, in the midst of Nigeria’s struggles with the aftermath of President Bola Tinubu’s decision to remove Subsidies in May 2023, a new development has presented itself, adding to the country’s challenges. The elimination of subsidies has caused a significant increase in Inflation rates due to the steep rise in Electricity tariffs, food prices, transportation costs, and housing rents. The Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) called for a nationwide industrial strike on June 3, 2024, only to retract the decision and suspend the strike the following day.
TLC strike shut down ed. institutions, workplaces, & medical facilities.
Trade unions in Nigeria decided to end a general strike by workers, which had caused a halt in economic activity. This was after the government pledged to raise the national Minimum Wage to a minimum of 60,000 Naira ($40, £32) per month. Unions have been demanding $330, however, the current monthly wage is only half of the government’s proposed amount. On June 3, 2024, the strike commenced and caused the country’s power grid to shut down, resulting in millions being deprived of electricity.
Officials from the government and union have agreed to convene daily for a week to engage in ongoing discussions aimed at reaching a lasting solution. At 02:00 local time on June 3, 2024, the entire nation was suddenly engulfed in darkness due to a targeted move by union members who disrupted operations at power control rooms and shut down electricity substations. Numerous flights were cancelled at the nation’s busiest airport in Lagos, as well as in Abuja, the country’s capital, leaving passengers stranded. Educational institutions, workplaces, and medical facilities nationwide all shut down as well.
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Since President Bola Tinubu took office one year ago, there have been a total of four strikes. His administration eliminated a financial benefit that maintained low fuel prices and terminated the practice of linking the naira’s value to the US dollar. The decision to cut the fuel subsidy and the sharp depreciation of the naira have caused the most severe economic downturn in decades. If their negotiations fail, unions are prepared to go on strike once more in just one week. Nevertheless, Nigeria’s current account balance, as highlighted in a positive report by the IMF, provides a ray of hope for the country’s economic prospects amidst the ongoing economic difficulties.