Reviving Nigeria from its economic doldrums has been nerve-racking for each government that governed it since its independence. At independence, Nigeria was an emerging economy with all the indices for growth and development. Gaining self-governance, its dense population was an asset, while its yet-to-be-tapped numerous mineral resources were an advantage.
At independence, the economy depended mainly on agriculture. Palm oil, hides and skins were the major exported crops, which brought foreign exchange earnings since crude oil had yet to be discovered.
Nigeria witnessed an oil boom in 1970, following the discovery of crude oil in 1965; hence, the country began to swim in sudden oil wealth. Crude oil brought prosperity, resulting in absolute neglect of agriculture. The oil boom of 1970 led to pride, as the leadership of the young nation thought its problem was not “money but how to spend it.”
Bad leadership, corruption, and mismanagement arising from the sudden wealth brought by the discovery of oil were the central vices that impeded growth. From 1966 to 1999, except for 1979 to 1983, when the country had a short stint at democracy, Nigeria was under military rule. The military rule was a cog in the wheel of progress and a spell that stifled growth and prosperity since the military went on a binge and frittered the oil wealth away.
In 1979, Nigeria welcomed democracy, and hope appeared on the horizon that the nascent democratic experience might have a light at the end and give a fillip to its economy.
However, the second republic, which brought in the administration of the late President Shehu Shagari, had Nigeria viciously gripped by afflictions that led to stunted growth, leading the government to declare an austerity measure.
The economy plummeted further as goods prices went astronomically high, leaving the citizens to groan under severe hardship, squalor, and penury. During the Shagari era, the hardship was excruciating, and the government was bereft of ideas, as the nation’s overdependency on oil could not salvage the pitiable situation.
The harrowing experience has continued to date. Stupefied, successive regimes have kept promising to revamp the seething economy. But even now, when President Bola Ahmed Tinubu holds the baton, the superfluously harassed nation still battles the horrendous situation.
In his efforts, President Bola Ahmed Tinubu introduced economic reforms to fight the completely battered economy he inherited and to position Nigeria in a vantage position. The reforms promise to rescue the collapsed economy, even though they are not without their attendant pain.
During the inauguration, President Tinubu dropped a blitzkrieg, announcing the removal of the petrol subsidy. Many Nigerians expressed their misgivings over the removal, while others thought it was a step in the right direction. Many believe the president should have introduced a palliative measure before removing the petrol subsidy. Still, since he removed it, Nigeria has saved N4 trillion annually, rechanneled towards critical infrastructure and social programmes, while he disbursed N5 billion to each state for palliatives in 2023. As at June 2024, it’s reported that the Federal Government may have rolled out palliatives worth N4.3tn to cushion the effects of the fuel subsidy removal under the current administration.
Due to a market-driven system, the reforms have seen foreign exchange inflows increase by $3 billion in Q3 2023. Foreign Direct Investment (FDI) has generated $14 billion in pledges from investors in India. The FDI includes other technological, renewable energy, and manufacturing agreements to create more employment.
Besides, the comprehensive reforms captured infrastructural development, such as road construction. Foreign reserves grew to $33.95 billion in November 2023 due to improved FDI inflows and partnerships, while non-oil revenue increased by 15%, and Gross Domestic Product (GDP) experienced an annual growth rate of up to 3.4% in 2024.
President Tinubu introduced vibrant social programmes, including an interest-free loan scheme for tertiary institution students and the distribution of one million bags of fertilizer to farmers.
In securing Nigeria from the menace of banditry and terrorism, much funding has been injected into the economy to improve the welfare of the security personnel saddled with the constitutional responsibility of protecting lives and property. The drive to beef up security has seen collaboration among security agencies, who are determined to embark on a massive hunt for bandits and terrorists.
Nevertheless, irrespective of the comprehensive reforms, experts have advised President Tinubu to leverage what he has already instituted, stabilising the macroeconomic fundamentals, such as controlling inflation, encouraging public-private partnerships (PPPs), empowering the youth, sustaining efforts to address food insecurity, implementing the National Integrated Electricity Policy, and investing in digital infrastructure.
According to an Insurance chief, “The government should tackle corruption, unemployment, insecurity, nepotism, epileptic power supply, and social infrastructures to boost the economy’s productive base through SMEs.”
Abimbola Arolawa, the Chief Executive Officer of Commodity Warehouse International Enterprise, advised that” Nigeria must adopt a sustainable economic structure and concentrate on exports, which are more attractive now as the devalued currency brings more money for exported goods and services.
However, to enhance GDP growth, the government should boost production in key sectors of the economy, reduce imports, increase export earnings, and improve food output.