On Monday, during the 30th Nigerian Economic Summit, hosted by the Nigerian Economic Summit Group and the Ministry of Budget and National Planning, the World Bank revealed that Nigeria must continue with its current economic policies to become an ‘engine of growth in Sub-Saharan Africa.’
The Senior Vice President of the World Bank Group, Indermit Gill, who addressed an audience with several Nigerian leaders in attendance, including the Vice president of the country Kashim Shettima, noted that Nigeria must sustain its current economic reforms for the next 10 to 15 years.
In his words, this would allow for a transformation in the country’s economy. His statement immediately drew a reaction from the crowd that seemingly opposed it.
“Nigeria will need to stay the course of current economic reforms for at least the next 10 to 15 years to transform its economy,” he World Bank official stated during the event covered by Channels TV.
“I don’t know if you are agreeing or disagreeing with me. If these reforms are sustained, Nigeria will transform its economy and become an engine of growth in sub-Saharan Africa,” he said, after the crowd reacted in a manner that can only be described as repudiation.
Economic hardship in Nigeria under its current policies
Nigeria’s economy, previously thought to be a potential development engine for West Africa, is currently reeling from a series of economic disasters that have thrown millions into poverty.
The country is presently dealing with soaring inflation rates, significant increases in fuel prices, and a currency that has lost value.
Under President Bola Ahmed Tinubu’s administration, two significant policy decisions, the abolition of fuel subsidies and the floating of the naira, have been core to the country’s current economic challenges.
As of October 2024, Nigeria’s inflation rate stands at a staggering 32.15%, the highest in decades. Daily necessities, from food to transportation, have become increasingly unaffordable for the average Nigerian.
The problem is made worse by the unprecedented increase in fuel costs which went from as low as N180 per liter to more than N1,000 in a little over a year.
If the economy was already under stress from the elimination of gasoline subsidies, the second significant policy change, floating the naira, sent it into overdrive.
The old system of regulated exchange rates, which had kept the currency relatively constant at about N400 per dollar and N600 on the black market, was abandoned by the Nigerian government in June 2023, allowing the naira to float freely in the foreign exchange market.
Although the goal of currency floating was to draw in international investment and ease foreign exchange shortages, the action has caused a significant strain on the economy instead.
The value of the naira has since plummeted to over N1,600 per dollar.
