Lagos, Nigeria – Despite recent commendations from the World Bank for Nigeria’s macroeconomic reforms under President Bola Ahmed Tinubu, a growing chorus of experts warns that the country’s approach risks prioritizing superficial improvements over substantive change. The reforms, implemented throughout 2023 and 2024, have been lauded for stabilizing certain economic indicators, but critics argue they fail to address the deep-seated governance issues that hinder sustainable development.
Kingsley Moghalu, former Deputy Governor of the Central Bank of Nigeria and President of the Institute for Governance and Economic Transformation (IGET), is among the most vocal. He emphasizes that without concurrent “behavioural reforms”—encompassing accountability, transparency, and the rule of law—the current economic adjustments risk becoming “a well-funded mask for governance decay.” Moghalu’s concerns echo a broader debate about the efficacy of purely economic solutions in a country grappling with systemic corruption and institutional weakness.
The Tinubu administration initiated a series of significant economic policies in 2023, including the removal of a long-standing fuel subsidy and steps towards liberalizing foreign currency exchange rates. These measures were intended to address fiscal imbalances and attract foreign investment. While the Central Bank has reported successes in stabilizing the exchange rate and reducing inflation – with foreign reserves reaching $46 billion, the highest level in a decade – the tangible benefits for ordinary Nigerians remain limited.
The removal of the fuel subsidy, in particular, triggered a sharp increase in petrol prices, contributing to a surge in inflation that reached 34.19 percent by June 2024, with food inflation exceeding 40 percent. This has pushed millions deeper into poverty, prompting protests and widespread hardship. Critics point to a lack of adequate planning for mitigating the social impact of the subsidy removal, noting the absence of robust mass transit systems and other social infrastructure to cushion the blow for vulnerable populations.
Moghalu argues that macroeconomic stability, while important, is merely a tool, not an end in itself. He contends that Nigeria’s current reforms do little to address the fundamental weaknesses in human development, basic services, and institutional integrity that are essential for long-term, sustainable growth. Federal savings generated by the subsidy removal have yet to translate into visible improvements in critical areas such as healthcare, education, or access to safe drinking water.
The country’s developmental challenges are starkly illustrated by several key indicators. Nigeria ranks 140 out of 180 on Transparency International’s Corruption Perception Index, indicating a pervasive problem of corruption. On the UN Human Development Index, Nigeria sits at 164 out of 193, reflecting significant shortcomings in health, education, and standard of living. Alarmingly, only 32 percent of Nigerian citizens have access to safe drinking water at home, and the World Bank’s Human Capital Index estimates that a child born in Nigeria today has only a 36 percent chance of reaching their full productive potential.
Beyond these social indicators, Nigeria’s economic structure remains heavily reliant on oil, with the manufacturing sector contributing a meager 8–10% of GDP. Electricity supply is also severely constrained, averaging around 5,000 megawatts – far below the level needed to support meaningful industrial productivity and economic diversification. Moghalu warns that without addressing these structural issues and reforming governance behaviours, macroeconomic gains will remain largely symbolic and fail to translate into widespread prosperity.
The ongoing insecurity in several regions of the country further exacerbates these challenges. In the Northwest and Northcentral regions, killings, kidnappings, and violent raids by so-called bandit gangs continue to plague communities. In March 2024 alone, nearly 400 people were reportedly kidnapped in Kaduna State, including 287 schoolchildren from a government secondary school in Kuriga town. While authorities later announced the rescue of 137 children, the initial reports highlighted the vulnerability of the population and the limitations of security forces.
Moghalu advocates for a fundamental shift in approach, moving away from what he terms a “growth delusion” towards a development strategy grounded in transparency, accountability, and citizen-centered policies. He draws parallels with the successful development trajectories of Southeast Asian nations like Singapore, Malaysia, and Indonesia, which paired economic reforms with stringent behavioural reforms to achieve lasting growth and prosperity. He argues that only by establishing a strong foundation of good governance can Nigeria unlock its vast potential and deliver tangible benefits to its citizens.
Moghalu’s analysis, informed by his experience as Deputy Governor of the Central Bank of Nigeria from 2009 to 2014 and detailed in his book, Emerging Africa: How the Global Economy’s Last Frontier Can Prosper and Matter, underscores the urgent need for a holistic approach to development that prioritizes governance as the cornerstone of sustainable progress. The challenge for the Tinubu administration, and for Nigeria as a whole, lies in translating economic reforms into meaningful improvements in the lives of its citizens and building a more just and equitable society.
