Why Nigeria’s Hardship Could Last Until 2027 According to Experts
This week’s economic news has been quite alarming due to a recent spike in petrol prices, prompting concerns from experts about the Federal Government’s economic policies and their potential impact in the short to medium term. Despite the government’s repeated assurances of an upcoming improvement and urging citizens to be patient, experts believe it could take until 2027 to start seeing relief from current difficulties.
However, this recovery timeline is contingent on the government taking effective action to address the ongoing economic challenges. Recently, the price of fuel was increased once again amidst a prolonged scarcity, with current prices ranging between N900 and N1,200 per liter. Analysts are predicting that this may lead to further economic problems and hardships for people.
Key issues include rising inflation, increasing unemployment, declining purchasing power, and higher costs of living, which are all contributing to a decrease in the standard of living. The future of Nigeria’s economy depends on factors such as recovery in the oil sector, stability in foreign exchange rates and interest rates, and improvements in agricultural productivity. Unfortunately, the odds are currently not in favor of these positive changes.
Adding to the economic troubles, Nigeria’s main revenue source, crude oil, experienced a significant price drop to $73 per barrel, the lowest this year. This downturn threatens the budget, which was based on a price of $77 per barrel, and complicates the already difficult task of meeting the production target of 1.7 million barrels per day.
With oil production averaging 1.4 million barrels per day and the crude oil price slump, the country’s fiscal plan for 2024 is struggling. This also impacts foreign reserves, which have recently dropped by over $500 million, putting pressure on the Naira, which fell to N1,630 per Dollar from N1,570 in August. This has increased inflation and affected the cost of imported goods.
Experts suggest that economic recovery is uncertain and may not begin until 2025 or 2026. Significant improvements could be seen within two to three years if the government addresses issues such as infrastructure, inflation control, currency stability, and boosting local production. However, these changes will likely be gradual rather than immediate.
Prof. Uche Uwaleke predicts that economic recovery will take longer than two years due to ongoing issues in the power and petroleum sectors and insecurity. David Adonri criticizes the government’s reform strategy, suggesting it’s not addressing essential areas like public spending and rural insecurity.
Dr. Femi Egbesola from the Association of Small Business Owners of Nigeria calls for a revamp of the economic team and greater focus on citizens’ welfare, anti-corruption measures, and support for local businesses. Mrs. Toyin Sanni from Emerging Africa Capital Group emphasizes the need for improved security, infrastructure, and policy coordination to foster economic growth.
In summary, experts agree that for Nigeria to see lasting economic improvement, the government must address several key areas, including security, infrastructure, policy coordination, and economic diversification. Immediate relief may be unlikely, but with the right measures, gradual progress could start to become visible in the coming years.
