By Adedapo Adesanya

Renowned economist, Dr Yemi Kale, says Nigeria must recalibrate its economy through disciplined reforms, forward-looking governance, and people-centred development.

Mr Kale, a former head of Nigeria’s statistics bureau and now Group Chief Economist at Africa Export-Import Bank (Afreximbank), gave this advice at the 2025 Vanguard Economic Discourse, where he delivered a keynote address that examined Nigeria’s current economic hardship and offered a compelling and urgent roadmap toward sustainable recovery and shared prosperity.

According to the economist, Nigeria is grappling with both external shocks and internal structural fragilities: from global inflationary pressures to domestic policy missteps.

“Business as usual is no longer an option,” he quipped, warning that slowing growth, commodity volatility, rising protectionism, and geopolitical instability are compounding Nigeria’s vulnerabilities.

“From exchange rate volatility to eroding investor confidence, Nigeria finds itself navigating a storm with limited buffers,” he explained.

He critiqued the removal of fuel subsidies, FX rate unification, tax overhauls, and monetary tightening, leading to surging inflation, currency depreciation, contracting investment, and intensifying socioeconomic hardship, noting that while the reforms instituted by President Bola Tinubu were necessary steps toward a rules-based economy, they were poorly sequenced and lacked critical safeguards.

“Most of Nigeria’s economic hardship is not caused by unforeseen events but by policies introduced without adequate safeguards. Public trust is built not just by making policies—but by implementing them with foresight, fairness, and firmness,” he submitted.

The economist then outlined a clear, actionable framework to transition Nigeria from macroeconomic fragility to resilient, inclusive growth revolving around three pillars: macroeconomic stability, economic diversification, and social investment and inclusive governance.

He noted that restoring confidence begins with fiscal discipline, transparent FX management, and tighter coordination between monetary and fiscal authorities.

“The first pillar is macroeconomic stability. Macroeconomic stability is not an outcome—it is a prerequisite. Nigeria must rebuild investor and citizen confidence by addressing fiscal imbalances, taming inflation, and restoring exchange rate credibility.”

He noted that this can be done via enforcing tax reform, curb leakages, and ensure budget credibility, empowering the central bank with operational independence and clear mandates, tackling inflation through supply-side reforms—particularly in agriculture and logistics, maintaining a transparent, market-reflective exchange rate supported by non-oil exports and reserve buffers, as well as creating a predictable investment climate that encourages long-term capital formation.

“The second pillar is economic diversification. Diversification is no longer optional. Nigeria’s dependence on oil exposes it to external volatility and fiscal instability. We must rapidly expand our productive base,” adding that core focus should be on agriculture, manufacturing, services and digital economy, small businesses, and infrastructure.

“The third and final pillar is social investment and governance. True growth is people-centered. It must deliver meaningful improvements in the lives of Nigerians across all demographics and regions.”

Dr Kale emphasised that key focus areas include the need to expand social safety nets to protect vulnerable populations from systemic shocks, improve access to basic services—housing, healthcare, electricity, water, and strengthen education through curriculum reform, teacher training, and vocational pathways.

He also advocated fostering entrepreneurship and digital inclusion, particularly for youth and women, deepening institutional trust through anti-corruption enforcement and policy continuity, and usage of digital governance to increase transparency, reduce leakages, and improve service delivery.

“Inclusive growth is not just a social ideal—it is a strategic economic necessity,” he said.

By Adedapo Adesanya

Nigeria’s economic team members, including the Minister of Finance and Coordinating Minister of Economy, Mr Wale Edun; and the Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, are in Washington, D.C. in the US for the 2025 International Monetary Fund (IMF) Spring Meetings, holding from April 21 to April 26.

The IMF Spring Meetings aim to foster macroeconomic stability, provide policy advice, and assist nations facing balance-of-payments challenges.

The gathering includes representatives from 190 countries, bringing together finance ministers, central bank governors, and key economic stakeholders to discuss pressing global financial challenges.

The Nigerian delegation also features senior officials from the CBN, chief executives of financial institutions, and representatives from the private sector, civil society organisations, and non-governmental organisations.

As Nigeria engages in these discussions, its delegation seeks to advance policies that safeguard economic stability, improve financial regulations, and enhance trade resilience.

The IMF and the World Bank—often referred to as the Bretton Woods Institutions—continue to play pivotal roles in shaping global economic governance. Established in 1944, the IMF primarily oversees monetary stability, while the World Bank focuses on poverty reduction and economic development.

With increasing concerns about global economic turbulence, the discussions will address financial market uncertainties, trade disruptions, and strategies to promote inclusive growth.

One of the dominant themes at this year’s meetings is the impact of US President Donald Trump’s sweeping import tariffs, which have affected trade relations globally since his return to office in January 2025.

Countries are expected to engage in discussions on mitigating the effects of these tariffs on their economies and identifying pathways to sustain trade partnerships.

Delegates will also focus on efforts to build a more resilient global economy capable of absorbing economic shocks and fostering sustainable development.

The meetings include: Global Economic Analysis –providing insights into financial trends and policy adjustments required to stabilise economies.

While the Bilateral Consultations session will facilitate discussions among member countries to negotiate strategies for economic cooperation, the Poverty Eradication Initiatives session will address economic disparities and evaluate financial programs aimed at reducing global poverty.

Additionally, the IMF will release its World Economic Outlook, detailing projections on economic growth patterns, while its Global Financial Stability Report will provide a comprehensive assessment of risks within the international financial system.

Another crucial topic on the agenda is reforming the global financial architecture to better support developing countries. The conference will examine structural improvements to financial institutions and propose new models for funding development programs.

The meetings will also explore the economic impact of climate change, discussing how nations can integrate environmental sustainability into financial planning.

By Adedapo Adesanya

The Manufacturers Association of Nigeria (MAN) has revealed that real manufacturing output in the country increased modestly by 1.7 per cent year-on-year to N7.78 trillion amid prevailing challenges.

The Director-General of MAN, Mr Segun Ajayi-Kadir, in a report titled MAN Economic Review- Second Half 2024, said the focus manufacturing indicators included capacity utilisation, production value, inventory, local raw materials utilisation levels, investment, expenditure on alternative energy sources among others.

MAN also said capacity utilisation improved marginally to 57.0 per cent in the second half of 2024, up from 55.1 per cent in the same period of 2023.

A half-on-half analysis showed a 1.2 percentage point increase in H2 2024 compared to H1 2024.

According to him, the development is buoyed by increased activity in motor vehicles and miscellaneous assembly, non-metallic mineral products, and electrical and electronics.

He, however, noted a half-on-half decline of 3.1 per cent in real production reflected rising costs and weak consumer demand.

“Nominal manufacturing output rose sharply by 34.9 per cent to N33.43 trillion, primarily due to inflationary pressures and rising domestic prices,” he said.

The MAN DG said the manufacturing sector’s local raw material sourcing increased to 57.1 per cent in 2024, up from 52.0 per cent in 2023.

This shift, he stated, was largely driven by foreign exchange scarcity, high import costs, and government incentives promoting local content.

Mr Ajayi-Kadir declared improvements observed in wood and wood products, textiles, apparel and footwear, and chemical and pharmaceuticals.

He said the electrical and electronics sector continued to lag due to dependency on imported components.

On the downside, the manufacturing expert noted that inventory of unsold finished goods surged by 87.5 per cent to N2.14 trillion in 2024.

He attributed the drive to weakened consumer demand, escalating production costs, and declining purchasing power.

He, however, said that a half-on-half decrease of 27.9 per cent in H2 2024 suggested improved clearance efforts and price adjustments.

He added that the country’s real manufacturing investment fell by 35.3 per cent year-on-year to N658.81 billion in 2024, reflecting economic uncertainty and reduced expansion plans.

“However, H2 2024 witnessed a 19.4 per cent increase compared to H1 2024, as manufacturers cautiously resumed capital expenditures.

“The employment situation in Nigeria’s manufacturing sector remained relatively stable in 2024, with 34,769 jobs added, a 1.8 per cent increase from 34,163 jobs in 2023.

“However, the number of employees leaving manufacturing companies also increased from 17,364 in 2023 to 17,949 in 2024, indicating ongoing labour mobility due to economic uncertainties, skill migration, and company restructuring,” he said.

Mr Ajayi-Kadir also said that electricity supply situation for industries improved in 2024, with the average daily supply increasing to 13.3 hours per day, up from 10.6 hours in 2023.

He stated that on a half-on-half basis, electricity supply rose from 11.4 hours per day in H1 2024 to 15.2 hours in H2 2024.

The MAN DG, however, noted that electricity tariffs surged by over 200 per cent for Band A consumers, significantly increasing manufacturing costs.

“In response to unreliable grid power and increases in prices of diesel and fuel manufacturers’ total expenditure on alternative energy sources surged to N1.11 trillion, a 42.3 per cent increase from N781.68 billion in 2023.

“On a half-on-half basis, manufacturers spent N404.80 billion in H1 2024, which increased by 75.0 per cent to N708.07 billion in H2 2024,” he said.

Mr Ajayi-Kadir added that rising interest rates posed a major financial burden, with commercial bank lending rates to manufacturers surging to 35.5 per cent in 2024 from 28.06 per cent in 2023.

“Consequently, manufacturers’ finance costs totalled N1.3 trillion, constraining investment and expansion plans,” he said.