By Olatunbosun Obafemi
Nigeria’s vision of transforming into a $1 trillion economy is rapidly unraveling amid mounting economic pressures, policy missteps, and structural deficiencies. In a string of assessments by global institutions and local experts, the consensus is clear: unless urgent, comprehensive reforms are enacted, the country risks prolonged economic stagnation—and deeper social unrest.
The International Monetary Fund (IMF) recently downgraded its growth outlook for Nigeria, citing a toxic mix of external shocks, domestic policy errors, and long-standing structural weaknesses. The removal of fuel subsidies by the administration of President Bola Ahmed Tinubu, implemented without adequate social protections, has driven up transportation costs and food prices, worsening poverty levels nationwide.
The sharp devaluation of the naira and persistent foreign exchange volatility have further exacerbated inflation, sapped investor confidence, and diminished consumer purchasing power. The result is a severe cost-of-living crisis that has sparked widespread protests and labor strikes across major cities.
At the 2025 Vanguard Economic Discourse in Lagos, Dr. Yemi Kale, Chief Economist at Afreximbank and former head of Nigeria’s National Bureau of Statistics, delivered a stinging critique of the current policy landscape. “Nigeria is at a critical strategic juncture,” Kale warned, citing erratic governance, ineffective planning, and short-term populist decisions that have eroded the economy’s resilience.
According to Kale, most Nigerians lack the economic buffers—such as savings or access to institutional support—needed to absorb macroeconomic shocks. He pointed to rising policy uncertainty and inflation as deterrents to business growth and job creation, urging the government to shift away from superficial fixes toward structural, inclusive reforms.
Energy infrastructure remains another flashpoint. Speaking at the 2025 Bullion Lecture, former Minister of Power and CEO of Geometric Power, Prof. Barth Nnaji, criticized the nation’s lack of investment in new power plants over the past decade. He described the government’s energy strategy as overly driven by foreign climate agendas and out of step with Nigeria’s industrial needs. Nnaji called for a pragmatic, gas-powered transition strategy, backed by decentralized, corruption-free investments.
Economic diversification was another key theme at the lecture. Dr. Ogho Okiti, CEO of ThinkBusiness Africa, stressed the importance of driving inclusive growth and boosting resilience through structural transformation. “To grow into a $1 trillion economy, Nigeria must sustain growth rates above 7%,” he said, warning that the current trajectory falls far short.
Okiti identified three prerequisites for sustained growth: reducing food costs relative to income, increasing access to skilled labor, and building local capacity rather than relying on imported expertise. “Without savings, there is no investment. Without investment, there is no growth,” he added, pointing to rising food costs and stagnant wages as a major barrier to development.
The African Development Bank echoed similar concerns. Its President, Dr. Akinwumi Adesina, underscored the deepening crisis of productivity and poor fiscal management. Speaking at the 20th anniversary of Chapel Hill Denham, Adesina lamented the decline in Nigeria’s GDP per capita—from $2,120 in 2010 to just $824 in 2024. By contrast, South Korea’s GDP per capita surged from $158 in 1960 to $36,132 in 2024, a 43-fold increase fueled by disciplined planning, robust savings, and industrial development.
“South Korea focused on creating wealth, while Nigeria focused on managing poverty,” Adesina said, calling for a decisive pivot toward productivity, innovation, and private-sector-driven growth.
While Nigeria recorded a 3.4% GDP growth in 2024—the highest in three years—economists argue that it is insufficient to achieve long-term goals. Growth was largely driven by the services sector, including financial services, real estate, and telecommunications, with little contribution from job-creating sectors like agriculture and manufacturing.
Data from 2024 shows a steady quarterly rise in GDP:
• Q1: 2.98%
• Q2: 3.19%
• Q3: 3.46%
• Q4: 3.84%
However, experts warn that this growth remains shallow and uneven. The non-oil sector accounted for 94.49% of real GDP in 2024—a slight drop from 94.60% in 2023—signaling marginal improvement in oil production but stagnation elsewhere.
Professor Bongo Adi of Lagos Business School warned that only 32% of the economy is currently expanding, with core sectors like agriculture and manufacturing either stagnant or in decline. He called for a renewed focus on export-led industrialization and integration into global value chains to drive meaningful economic transformation.
The message from both international institutions and domestic analysts is clear: without bold, strategic reforms and a deliberate commitment to inclusive growth, Nigeria’s $1 trillion economy dream will remain a distant illusion.
