Muraya wa Njuguna
Just 2 years ago, Nigeria held Africa’s largest economy title. The International Monetary Fund (IMF) now projects the country to fall even further, from the 2nd to the 4th spot behind South Africa, Egypt and Algeria. The GDP is estimated to be 253 billion USD.
President Bola Tinubu, a man on a mission main priority was to tackle the country’s ailing economy by enacting bold economic reforms. He ended the gasoline subsidy and shifted to a unified, market-reflective foreign exchange (FX) rate – i.e. naira value to be set by financial markets.
The country has had multiple headwinds over the last decade, some current. They include – currency devaluation, inflation, insecurity and poor governance. The constant power blackouts have a had an immense negative impact on businesses and industries.
Some of these badly needed reforms came at a very challenging time. When the fuel subsidies were removed, gasoline prices at the highest point had shot up by a whooping 163%. Such an ungodly rises coupled with inflation is cocktail of excruciating pain to ordinary Nigerians.
The Naira had depreciated by 41% against the US dollar, but has since rebounded about 20%. The economy is expected to grow by 3.7% in 2024, and 4.1% in 2025.
“The petrol subsidy and FX management reforms are critical steps in the right direction towards improving Nigeria’s economic outlook. Now is the time to truly turn the corner by ensuring coordinated fiscal and monetary policy actions in the short to medium term”, said Shubham Chaudhuri, World Bank Country Director for Nigeria.
Nigeria Development Update, titled “Turning the Corner”.
Gut wrenching news of the country’s insecurities have headlined global news such as abductions of school children in northwestern and central regions by armed bandits for ransom shakedown.
As the saying goes, “no pain, no gain“; the hope is that better days as a result of bold economic reforms will bear fruit as they take hold.
