IMF Warning: Nigeria’s $1 Trillion Dream at Risk Over Policy Chaos

IMF Warning: Nigeria’s $1 Trillion Dream at Risk Over Policy Chaos

IMF warning reels the air as Nigeria’s dream of becoming a $1 trillion economy is slipping away fast, and global experts aren’t holding back. The International Monetary Fund and leading economists say the country is heading toward economic disaster, driven by poor government decisions and mismanaged reforms. Instead of building a solid path to growth, these choices are weakening the economy, raising inflation, and leaving millions of Nigerians worse off.

The IMF recently cut Nigeria’s growth forecast. They blamed falling oil prices and weak policies under President Bola Tinubu’s leadership. The removal of fuel subsidies, done without a safety net, has made life harder for many. Transport costs have soared. Prices of food and other daily needs are out of reach for millions. Poverty is getting worse.

Things got even worse when the naira lost value sharply. Foreign exchange became unstable. Inflation took off. Investors pulled out, and people cut back on spending. Economists say the reforms from Tinubu’s team might be doing more harm than good because they didn’t plan well for the problems the changes would cause.

Now, people across the country are speaking up. Labor unions are on strike. Protests fill major cities. Many Nigerians feel the government isn’t listening to their hunger, their joblessness, or their shrinking wallets.

Sectors like farming and energy, which could help grow the economy, are also struggling. Violence in rural areas is making food hard to produce. Farmers are being attacked. Crops are being destroyed. Supplies aren’t getting to markets. Food insecurity is now a big threat.

Experts at a major economic event in Lagos made things clear. Nigeria’s problems are not all from outside forces. Much of the damage is coming from inside.

Dr. Yemi Kale, Chief Economist at Afreximbank, didn’t hold back. He said the government’s poor planning and short-term fixes are making the economy weaker. He pointed out that Nigeria keeps using band-aid solutions instead of solving the real issues. The result is a country where most people have no savings or protection to handle hard times.

“The stark reality is this: most Nigerians lack the economic buffers—such as savings, social protections, or institutional support—necessary to weather macroeconomic shocks,” Kale said. He also said that the rising inflation and uncertainty in policies are scaring off businesses and investors. Fewer jobs. Less credit. More hardship.

Kale called on the government to stop playing politics with the economy. He said what Nigeria needs is leadership that thinks long-term, not just about winning the next election.

Another strong voice came from Prof. Barth Nnaji, a former power minister and CEO of Geometric Power. At the Bullion Lecture in Lagos, he said Nigeria’s failing energy system is holding back progress. No new power plants have been built in over 10 years. He said the current energy plan is unrealistic and too focused on foreign climate ideas that don’t work for Nigeria.

Nnaji urged the government to use Nigeria’s natural gas more wisely. He said we can’t get rid of gas now just to follow foreign advice. Doing that would hurt jobs and industry. He called for smart, local energy policies that include honest, private investment. He used the Aba Integrated Power Project as an example of what could work if corruption is kept out.

Dr. Ogho Okiti, the CEO of ThinkBusiness Africa, also added to the warnings. He said if Nigeria really wants to grow into a $1 trillion economy, the country must grow by at least 7% a year. At that rate, the economy could double in a decade. But right now, growth is nowhere close.

Okiti said Nigeria’s biggest problems are the high cost of food, lack of skilled labor, and overdependence on foreign knowledge. “The cost of food in Nigeria continues to outpace income growth, leaving most citizens with little discretionary income—and therefore, no savings,” he said.

He stressed that without savings, there’s no investment. And without investment, the economy can’t grow. He said skills training needs urgent attention to raise productivity and help businesses grow.

All these expert opinions point to one message: Nigeria must act fast and wisely. Without strong and inclusive reforms, the $1 trillion economy goal may never be more than a dream.

Professor Bongo Adi from Lagos Business School agrees. He said Nigeria’s vital sectors like farming and manufacturing are in serious decline. Only 32% of the economy is growing. But most of that growth comes from areas like banking and telecoms, which don’t create many jobs.

Adi called for new policies that help Nigeria make things it can sell to the world. He said this is the only way to build a strong, lasting economy.

Dr. Akinwumi Adesina, head of the African Development Bank and a former agriculture minister, gave one of the most sobering assessments. Speaking at a private investment event, he said Nigeria’s economy is too weak to support its people.

Adesina pointed out that in 1960, Nigeria’s GDP per person was $1,847. By 2024, it had dropped to just $824. Even though there was some improvement in 2010, things have gone backward since then.

He blamed poor budgeting, unstable leadership, and too much focus on oil. Weak infrastructure, rising joblessness, a weak naira, and poor factories have made it worse.

Adesina compared Nigeria with South Korea. In 1960, both had similar GDPs per person. But by 2024, South Korea’s was $36,132—43 times Nigeria’s number. He said Korea saved more, especially through pensions. Nigeria’s savings system is much smaller. That’s a big part of the problem.

His advice? Stop trying to manage poverty. Instead, focus on creating wealth. That means boosting productivity, supporting innovation, and getting private businesses to invest.

Despite all these troubles, there’s still a small light at the end of the tunnel. Nigeria’s economy grew by 3.4% in 2024. It’s the best growth in three years. But experts say that’s not enough. Without big changes, even this small progress could disappear.

Right now, Nigeria is at a crossroads. One road leads to deeper poverty. The other leads to reform, inclusion, and real growth. The question is: will the leaders listen?