Nigeria, touted as the giant of Africa, is projected to witness a gross domestic product (GDP) growth of 3.1% in 2024, according to the World Economic Situation and Prospects (WESP) report published by the United Nations. This growth, up from an estimated 3.0% in 2023, is attributed to policy reforms under the administration of President Bola Tinubu. However, beneath this optimistic projection lies a grim reality: the escalating cost of living for Nigerian citizens and a myriad of economic challenges that threaten sustainable development.
The UN report accentuates several factors that could impact Nigeria’s GDP growth in 2024. Chief among them is the country’s burgeoning public debt, which poses constraints on the government’s capacity to invest in economic expansion. Persistent inflation and a weak business environment further compound these challenges, posing significant risks to the economy’s stability.
Despite these hurdles, the report identifies potential areas of growth, particularly in Nigeria’s hydrocarbon sector. Policy reforms aimed at bolstering in-country oil refining capacity are anticipated to have a positive impact on domestic fuel costs, providing a glimmer of hope amidst economic uncertainties. However, the purported economic expansion fails to reflect the lived experiences of ordinary Nigerians, who contend with the unprecedented cost of living. Inflation has surged to double-digit figures, driving up prices of essential goods and services and erod- ing the purchasing power of the populace. Food insecurity looms large a agricultural productivity struggles to keep pace with population growth, ex- acerbating the plight of the urban poor.
Moreover, the depreciation of the Nigerian naira exacerbates the situation, making imports more expensive and further squeezing household budgets. Inadequate infrastructure, rampant corruption, and insecurity exacerbate these economic woes, hindering inclusive growth and development.
The COVID-19 pandemic has only ex- acerbated Nigeria’s economic challenges, leading to disruptions in sup- ply chains, reduced productivity, and widespread job losses. While the government has implemented stimulus measures, they have been in- sufficient to address the structural deficiencies plaguing the economy.
The UN’s broader forecast of a slow- down in global growth from 2.7% in 2023 to 2.4% in 2024 further compounds Nigeria’s economic predicament. High-interest rates, escalating conflicts, and sluggish international trade pose additional risks to the global economy, threatening to dampen Nigeria’s growth prospects further. The situation has led to citizen unrests and thereby making Bola Tinubu’s young reign largely unpopular among majority of Nigerians.
Nigerians Protest Over Economic Hardship
Meanwhile, in a display of frustration and desperation, some residents poured onto the streets in a massive protest against the relentless economic challenges plaguing Nigeria. The catalyst for this outcry stems from the pervasive impact of skyrocketing living costs, exacerbated by the broader downturn of the national economy.
Throughout this year, a series of demonstrations have unfolded across various Nigerian cities, underscoring the profound discontent simmering within the population. However, the recent protest in Minna took on a particularly potent form, with women and numerous youths converging at the pivotal roundabout in the Pkakungu area to amplify their grievances.
The protest, characterized by its sheer scale and impassioned fervor, saw roads blocked and vehicular movement brought to a standstill by the resolute youth and men leading the charge. Undeterred by attempts from law enforcement to quell the unrest, the protestors stood their ground, resolutely demanding attention and action from both federal and state authorities.
At the heart of their impassioned pleas lies a dire plea for urgent intervention to alleviate the economic burdens suffocating communities nationwide. The protestors, representative of a populace teetering on the brink of despair, implored the government to implement tangible measures to mitigate the prevailing hardship before it spirals further out of control.
Indeed, the scene in Minna serves as a microcosm of the broader socio-economic challenges confronting Nigeria—a nation grappling with inflation, unemployment, and a dwindling purchasing power. For the ordinary citizen, each passing day brings with it a mounting struggle to make ends meet, as the specter of economic hardship looms large over households nationwide.
While the protest in Minna may have momentarily captured the nation’s attention, its significance extends far beyond the confines of a single city. It stands as a poignant reminder of the collective resilience and unwavering spirit of a populace unwilling to suffer in silence amidst adversity. Moreover, it serves as a clarion call to action for those entrusted with steering the nation towards prosperity and stability.
In the face of mounting discontent and unrest, the onus lies squarely on the shoulders of policymakers with President Tinubu in the realm to heed the voices of the people and institute meaningful reforms aimed at revitalizing the economy. The time for rhetoric and empty promises has long passed; what is needed now is decisive action and a genuine commitment to addressing the root caus- es of economic hardship.
Prolonged Period of Higher Borrowing Costs and Credit Constraints
Moreover, one of the critical concerns raised in the report is the potential for a pro- longed period of higher borrowing costs and credit constraints, which could pose a significant challenge for heavily indebted countries like Nigeria. With higher costs of servicing debt looming on the horizon, governments may find it increasingly difficult to allocate resources to- wards essential investments, including those aimed at addressing climate change and meeting the Sustainable Development Goals (SDGs).
The need for increased in- vestment in climate resilience and sustainable development becomes all the more pressing in light of the challenges posed by higher borrowing costs. However, the report warns that achieving these goals will become increasingly challenging in a climate of constrained cred- it and rising debt burdens.
On the inflation front, the report provides a mixed outlook for Nigeria. While inflation is expected to gradually decline from 5.7% in 2023 to 3.9% in 2024, there are lingering concerns about potential risks that could lead to further price escalations. Geopolitical conflicts, in particular, pose a significant threat, with the potential to drive up prices for key commodities such as oil and natural gas.
The projected decline in inflation is attributed to the expected dissipation of temporary factors that have driven up prices in recent years, including supply chain disruptions and energy price shocks. How- ever, the persistent risk of geopolitical conflict underscores the fragility of the economic outlook and the potential for unforeseen disruptions to derail progress.
To counter these setbacks, comprehensive reforms aimed at enhancing fiscal sustainability, promoting inclusive growth, and fostering resilience to external shocks are essential. Moreover, efforts to diversify the economy, strengthen institutions, and mitigate climate risks must be prioritized to ensure sustainable development and improve the quality of life for all Nigerians.
Nigeria Targets N19.4 Trillion In Tax Revenue For 2024
As the Federal Government of Nigeria unveiled an ambitious tax revenue target of N19.4 trillion naira for the year 2024, signaling a significant increase from the record N12.37 trillion naira achieved in 2023, this means one thing only, citizens must braze up for more taxes as the year winds down.
Addressing participants at the Federal Inland Revenue Service’s (FIRS) 2024 Strategic Management Retreat in Abuja, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, outlined the government’s fiscal strategy for the year 2024. Emphasizing the need to enhance tax revenue, Edun highlighted the government’s aim to shift away from expensive debts towards sustainable domestic revenue sources.
“We are projecting a 77% increase in Internally Generated Revenue (IGR). Our revenue as a percentage of Gross Domestic Product (GDP) is low at below10%.It should be much higher. Government needs to spend so much on infra- structure and social services,”
Edun stated. He under- scored the importance of increasing tax revenue to enable the government to fulfill its obligations to the citizenry effectively.
Since the removal of the un- popular fuel subsidies, the federal government has witnessed a significant uptick in revenue generation, withover 1 trillion naira generated monthly. Edun noted that achieving a 77% increase in revenue targets would imply aiming to generate 1.77 trillion naira every month, signaling a considerable challenge but also an opportunity for fiscal sustainability.
Zacch Adedeji, Chairman of the Federal Inland Revenue Service, also expressed confidence in achieving the ambitious tax revenue tar- get for 2024. He attributed this optimism to the effective tax collection system and a favorable economic environment. Adedeji emphasized the importance of a thriving economy in driving tax revenue growth, stating,
“What determines whatever we have comes from micro-economic indices because when the economy runs well, we are going to be taxing prosperity, not poverty.”
In light of these challenges, policymakers must prioritize comprehensive reforms aimed at diversifying the economy, enhancing infrastructure, and tackling corruption. Targeted social interventions are also crucial to provide immediate relief to vulnerable segments of society.
Ultimately, Nigeria’s economic progress should not be measured solely by GDP figures but by tangible improvements in the lives of its citizens. Until the cost of living is alleviated and economic opportunities are accessible to all, the purported economic expansion will remain hollow for millions of Nigerians striving to make ends meet amidst global economic uncertainty.