You may suffer till 2027, experts warn Nigerians

The economic hardship plaguing Nigeria could last up to 2027, economy experts have warned Nigerians.

“I am afraid it will take quite some time to fix,” President, Association of Capital Market Academics of Nigeria (ACMAN), Prof. Uche Uwaleke, said according to a report Vanguard published on Saturday.

“Certainly not in the next year or two years. The inherited legacy challenges are humongous, especially in the power and petroleum sectors which are compounded by insecurity.

“Until these structural constraints are dealt with, inflation and exchange rates will remain elevated over the short and medium term,” he said.

Providing his own insight into the current economic hardship, David Adonri, Analyst/Executive Vice Chairman Highcap Securities Limited, a Lagos-based finance and investment house, believes the government’s approach to economic reform is wrong-headed.

“There are short-term pains associated with demand management reforms. However, FGN is approaching the situation wrongly such that the pains may extend beyond normal expectations,” he said.

“FGN is not extending the reforms to public spending which ought to be in austerity mode so that inflation can reduce.

“Additionally, there is no seriousness on the part of FGN to eliminate excruciating rural insecurity in order to close the supply gap in agriculture and other rural-based production activities.

“Now, rural communities in parts of the country are embarking on self-defence to prevent their extermination since FGN has left them to their fate. So far, FGN has failed to mobilize the country’s idle factors of production to domestically create wealth and generate productive employment.

“As a result of these lapses, it may be difficult to predict economic revival even in the next 5 years.”

Commenting on the hardship and the outlook for a turnaround, President of the Association of Small Business Owners of Nigeria (ASBON), Dr. Femi Egbesola, noted that the degree of poverty and hardship is deepening by the day, and called on the federal government to rejig its economic team.

His words: “People’s disposable income is being eroded, many are hungry and angry, local businesses are closing down, international businesses are relocating out of Nigeria, so many avalanches of challenges. This is a direct indicator that something is wrong with our fiscal policies, macro economy and largely our policymakers.”

Mrs Toyin Sanni, Group CEO, Emerging Africa Capital Group, said though the current hardship being experienced by Nigerians was induced by ‘bold reform initiatives’ of the present administration, she stated that promised turnaround is, however, filled with several conflicting events that have continued to mar progress of the initiatives.

She stated that the expectation for a turnaround is contingent upon various factors aligning and projected a 2025/2026 timeframe for any visible impact and changes in the economy.

“In recent times, the economic landscape of Nigeria has been shaped by bold reforms initiated by the new administration,” she said.

“These reforms, though necessary, have resulted in significant economic hardships for the average Nigerian. The government’s stance remains one of perseverance, urging citizens to endure the current challenges with the promise of a brighter future.

“However, the path to this promised turnaround is fraught with complexities as several conflicting events and structural challenges have continued to undermine the progress of these initiatives.

“For example, while the Central Bank of Nigeria (CBN) has taken an aggressive stance against inflation, raising interest rates from 18.5% in June 2023 to 26.8% in June 2024, inflation has continued to rise, touching 33.4% as of July 2024, a 28-year high. This is due to persistent challenges such as insecurity in food-producing regions, high logistics costs, inadequate transport infrastructure, and the ongoing depreciation of the naira. These factors have limited the effectiveness of the monetary tightening measures.”

Continuing, she stated: “The expectation for a turnaround is contingent upon several factors aligning effectively. Studies have shown that the impact of monetary policy changes, such as interest rate hikes, takes time to filter through the economy—often between 12 to 24 months. However, in Nigeria’s context, this period could be extended due to the underlying structural issues that amplify economic vulnerabilities. Therefore, a tangible turnaround in economic conditions might not be evident until late 2025 or early 2026, provided that complementary fiscal policies are also implemented effectively.”

Responding to the economic hardship in the country, Clifford Egbomeade, Public Analyst & Communications expert said: “The economic hardship in Nigeria has been exacerbated by certain government policies, and while the government urges citizens to be patient and anticipates a future turnaround, the immediate reality remains difficult. It is difficult to predict the exact time frame for economic recovery, as it depends on the successful implementation of reforms, global economic trends, and domestic stability. Typically, significant improvements may begin to manifest within 2 to 3 years if the government effectively addresses key issues such as infrastructure development, inflation control, currency stabilization, and boosting local production. However, these changes will likely be gradual and not provide immediate relief’’.

For Nigeria to witness a lasting turnaround in its economic fortunes and improvements in the lives of the average citizen, Mrs Toyin Sanni, Group CEO, Emerging Africa Capital Group, highlighted the need for the government to strengthen security in agricultural regions, invest in infrastructure development, enhance policy coordination between government agencies, encourage private sector investment, support the development of technology and economic inclusion of women and youths.

She also emphasised the need for general societal and socioeconomic cohesion, strengthening of sociocultural ties and long-term economic diversification among others.

She stated: “The government must prioritize security in key food-producing areas. Addressing insecurity will not only boost agricultural output but also help stabilize food prices, which is crucial for controlling inflation. The government should fast-track investments in critical infrastructure, particularly in transportation and logistics. Improved infrastructure will reduce the cost of doing business, enhance competitiveness, and support economic growth.

“Effective policy coordination between the monetary and fiscal authorities is essential for a successful economic turnaround. The CBN’s efforts to control inflation must be complemented by government policies that promote growth and stability. This includes ensuring that fiscal measures do not counteract the effects of monetary policy. The government should create an enabling environment for private sector investment, particularly in critical infrastructure sectors. Public-private partnerships could play a vital role in addressing some of the infrastructural deficits and driving economic growth.

“Nigeria must accelerate efforts to diversify its economy away from oil dependency. Investing in agriculture, manufacturing, and technology sectors will create more resilient and sustainable economic growth. The government should actively support the growth of the technology sector through the establishment of industrial parks, provision of subsidies, and funding opportunities for technology founders. These initiatives will foster innovation, create jobs, and position Nigeria as a hub for technological advancements in Africa,” she said.

Mrs Sanni added that, “Women and girls make up nearly half of Nigeria’s population, and citizens under 35 years old account for at least 70% of the population. However, the full potential of these groups is often constrained by unequal access to power and resources, along with exclusionary norms, practices, laws, and policies. To harness the full potential of Nigeria’s population, the government must prioritize the empowerment of women and youth by ensuring equitable access to education, resources, and opportunities.

“Nigeria, with its rich diversity of over 250 ethnic groups, has long faced challenges related to tribal tensions and ethnic divides. This has contributed to a lack of unity as well as insecurity in some regions of the country. To achieve national unity and foster economic progress, it is crucial to strengthen societal cohesion and sociocultural ties through shared prosperity across regions. The government must prioritize policies that promote inclusivity, reduce inequalities, and encourage dialogue across different communities to build a more harmonious and prosperous society,”

On recommendations for a possible turnaround, President of the Association of Small Business Owners of Nigeria (ASBON), Dr. Femi Egbesola, said: “My immediate recommendation will be for the government to rejig the economic team if really we expect different results. There is also a need for the government to prioritize the immediate and remote welfare of the citizens, particularly in the areas of their immediate needs. The government should be intentional about fighting corruption headlong as it is the root cause of the other many challenges we now contend with and is the monster fighting against some of the laudable policies of the government.

“Fighting corruption will also make the government more transparent. When the government is transparent and its citizens are able to see and understand the workings of government, they will also be able to contribute to the government’s development agenda and will naturally be more cooperative. The government must focus heavily on improving the ease of doing business and developing the key economic sectors, one mainly is the MSME sector which creates 96! of businesses and employs 84% of the workforce. This sector which also includes agriculture, must be supported to grow and scale up to the point of not just sustaining our local production demands but should be able to actively export to earn enough forex to the country. We just must improve and support non-oil exports.”

On his recommendation to fix the economy, Prof. Uche Uwaleke, President, Association of Capital Market Academics of Nigeria, ACMAN, said: “Going forward, what has become obvious is that the energy sector requires urgent reforms beginning with the NNPCL. I also think that fiscal and monetary authorities must acknowledge that the Agric sector holds the key to lower inflation, job opportunities and inclusive economic growth and should join hands to tackle the challenges. On its part, the CBN should reform and resuscitate targeted interventions in the Agric value chain while at the same time rethinking the current monetary policy stance that over-relies on blunt traditional tools.”

In his recommendation, Clifford Egbomeade, Public Analyst & Communications expert said: ‘‘To facilitate a turnaround, the government should focus on policy reforms that prioritize economic diversification, job creation, and social safety nets to cushion the impact on vulnerable populations.”