Nigeria’s economic crisis: A homegrown disaster, not an IMF plot!

Nigeria’s perennial economic woes have once again ignited a familiar chorus of blame, this time directed at the International Monetary Fund (IMF) and the World Bank. The recent economic turmoil, marked by skyrocketing inflation, currency devaluation, and soaring unemployment, has fueled a narrative that paints these international financial institutions as the culprits behind Nigeria’s economic woes. However, such a simplistic view obscures the real drivers of Nigeria’s economic crisis: systemic failures deeply rooted within the country itself.

The legacy of the Babangida-era SAP has cast a long shadow. Introduced as an IMF-backed reform package, SAP sought to shift Nigeria from protectionism to a more liberal, open-market economy through currency devaluation, subsidy cuts, and trade liberalisation. While this framework was aimed at fostering growth, it also left a scar on public memory, embedding a deep mistrust of foreign influence in Nigeria’s economic policies. Today, as President Bola Tinubu navigates a fragile economy, similar policies—including floating the naira and removing fuel subsidies—are triggering old fears of IMF overreach. Yet, the real issues lie not with external advisors but within Nigeria’s own leadership and policy decisions.

“While these measures may be necessary for long-term economic health, their hasty implementation without adequate social safety nets has caused immense hardship for the populace. The government’s failure to effectively communicate and mitigate the impact of these reforms has further eroded public trust.”

The recent economic reforms introduced by the Tinubu administration, such as the removal of fuel subsidies and the floating of the naira, have drawn comparisons to SAP. While these measures may be necessary for long-term economic health, their hasty implementation without adequate social safety nets has caused immense hardship for the populace. The government’s failure to effectively communicate and mitigate the impact of these reforms has further eroded public trust.

It is imperative to recognize that Nigeria’s economic problems are largely self-inflicted. Decades of corruption, poor governance, and a lack of investment in critical infrastructure have weakened the country’s economic foundation. The government’s overreliance on oil revenues, coupled with its failure to diversify the economy, has left it vulnerable to global price fluctuations.

Meanwhile, the World Bank’s Chief Economist, Dr. Indermit Gill, added fuel to the fire by suggesting that reforms would take “ten to fifteen years” to yield results—a statement that, though likely accurate, seems oblivious to the daily hardships Nigerians are enduring. But instead of questioning the efficacy of these reforms or considering their suitability to Nigeria’s unique economic challenges, public discourse has largely defaulted to blaming international institutions. The truth, however, is that Nigeria’s governance choices—especially around subsidy savings, foreign exchange management, and fiscal transparency—are as much, if not more, to blame.

Fuel subsidies were lifted on the premise that the resulting savings would fund social protections for the poorest. Yet there is little evidence of how these funds are being used. Similarly, while floating the naira was intended to attract foreign investment, the currency’s volatility has created uncertainty, further raising inflation and discouraging potential investors. If the reforms are to succeed, the government must manage them strategically and transparently, ensuring they serve Nigeria’s long-term goals, not merely external optics.

Moreover, Nigeria’s leadership must reckon with the long-standing issues behind the crisis, which are not IMF-driven but internally rooted. Mismanagement, lack of accountability, and corruption have done far more harm than any IMF policy ever could. Until Nigeria confronts its own role in creating and perpetuating these problems, foreign aid and debt relief will only offer short-term relief, leaving the country in perpetual crisis.

In conclusion, while the IMF and World Bank have played a role in shaping Nigeria’s economic policies, they cannot be solely blamed for the country’s persistent economic challenges. The root causes of these issues lie deeply within Nigeria’s own governance structures, corruption, and lack of accountability. To truly address these problems, the Nigerian government must prioritise domestic reforms, such as strengthening institutions, improving transparency, and diversifying the economy.

By investing in sustainable infrastructure, education, and healthcare, Nigeria can build a resilient economy that benefits its citizens. Additionally, the government must foster a conducive business environment that encourages both domestic and foreign investment. Only by addressing these fundamental issues can Nigeria break free from the cycle of economic stagnation and achieve sustainable prosperity.