Economic reforms that will shape Nigeria in 2024

NIGERIANS earnestly hope the country’s economic challenges abate soon, as the present indicators and reforms by President Bola Tinubu-led administration continue to take a toll on the population.

According to data, Nigeria’s inflation rate in November 2023 jumped to 28.2 per cent from 27.33 per cent in October. The November inflation rate was the 11th consecutive increase reported that year as most citizens battled with the high costs of household commodities.

Apart from core inflation, food inflation put more Nigerians on the edge as food inflation for November 2023 surged to 32.84 per cent on a year-on-year basis. It was 8.72 per cent points higher than the rate (24.13 per cent) recorded in November 2022.

File Photo of a typical Nigerian market

Inflation, purchasing power and concerns

The spike in food inflation is squeezing spending, with most Nigerians devising strategies to manoeuvre the crisis.

For a restaurant manager, Oluchi Mgbemena, the continuous rise in the price of foodstuffs made her do ‘hedging’ (an arrangement that allows early buying in bulk to avoid spontaneous rise) with major food marketers.

“Some of us in the restaurant business have to form operatives to pool our money and buy foodstuffs in large quantities. We had an understanding with the major marketers of what we buy so we could pay and buy early enough to hedge against rising food inflation,” she said.

She noted that the system helped her and her colleagues recover costs and remain in business as food inflation squeezes purchasing power.

Government’s optimism despite inflation spike

For the Central Bank (CBN) Governor Olayemi Cardoso, 2024 will be better and promising, as he believes Nigerian government reforms are bearing sustainable fruits.

“Next year (2024) will be better, and we will be seeing our reforms lessen our numerous economic problems,” he said.

However, the massive debt servicing in the 2024 budget doesn’t offer so much hope for a depressed economy as Nigeria’s.

What  2024 budget says

President Bola Tinubu on January 1,signed the N28. 7 trillion 2024 Appropriation bill into law.

Some of the key estimates are capital of expenditure, N10 trillion;recurrent expenditure, N8. 8 trillion;debt service, N8. 2 trillion and statutory transfers, N1. N7trillion.

The high inflation at 28.2 per cent and N8. 2 trillion to be spent on debt servicing will affect private sector borrowing from commercial banks. This would likely result in further exit of companies from Nigeria, as experienced with Procter and Gamble – P&G and GlaxoSmithKline-GSK companies.

Some economic experts have warned Nigerians to gird up their loins, noting the reforms would keep disrupting the economy.

“We need to be concerned about the macroeconomic fundamentals and what we borrow funds for. Does it have a direct bearing on the economy, or are we borrowing for the flamboyancy of the political elites,” an economist, Bongo Adi, said.

Nigeria’s total debt now stands at N87. 91 trillion, according to data from the Debt Management Office (DMO), which puts pressure on inflation and worsens Nigeria’s currency problems.

Tinubu’s reforms and Nigerians’ plight

The key focused areas of Tinubu’s reforms include the removal of petrol subsidies, liberalisation of the foreign exchange market, removal of 43 items from FX restrictions, and tightening monetary policy.

These policies triggered economic disruption and untold hardship among Nigerians.

Nigerians have had to deal with skyrocketing fuel prices as the government’s renewed hope has masqueraded before Nigerians as something different.

Since May, retail petrol prices rose by an average of 63 per cent, and the naira depreciated by 41 per cent against the US dollar.

As Nigerians grapple with subsidy removal, another Federal Government’s reform – the CBN’s foreign exchange harmonisation – worsened the crisis by sending the naira into a chaotic dance in the forex market.

Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) show how the naira fared against the dollar in 2023.

It was N576.3 in May, N968. 3 in June, N962.7 in July, N599. 9 in August, (approximately N600), N935.3 in September, N1,002. 2 in October, N1,189. 5 in November, and N1,147. 58 in December.

Commenting on the reforms, World Bank Lead Economist for Nigeria, Alex Sienart, said they would pay off but would take some time.

“We’re still in the period of very significant adjustments to these reforms, in the sense that many of them are really difficult. For instance, adjustments of currencies and subsidy removal. The fact that inflation is very high is one of the impacts of these reforms,” he said.

Nigeria’s Minister of Finance, Wale Edun, offered hope for 2024 and said, “The government is intentional in debt reduction. Nigeria could not afford to rely on loans but needed to ramp up revenue,” he said during the ministry’s budget defence.

“At our current status as a nation, we are clearly in no position to rely on borrowing. We have an existing borrowing programme. Our direction is to reduce reliance on borrowing, reduce the quantum and percentage of deficit in financing in the 2024 budget,” he added.

Already, debt servicing is 98 per cent of Nigeria’s revenue, and the country cannot afford to pile up more debts.



    Amid these concerns, Nigerians want government officials at all levels to exercise prudence in the management of resources.

    “We cannot afford to borrow money to pay these flamboyant salaries of political office holders,” said the Civil Society Legislative Advocacy Centre (CISLAC) executive director, Auwal Musa Rafsanjani.

    Auwal Rafsanjani,, CISLAC executive director

    Sharing a similar concern, a social critic and professor of Law at the Baze University, Sam Amadi, said Nigeria must redefine public service sector for maximum impact.

    “I have asked several times if we need directors to have about four Hilux. The concept is to drive down the service costs,” he said.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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