Experts Urge Structural Economic Reforms to Unlock Nigeria’s Growth Potential
By Patience Ikpeme
Leading Nigerian economists have called for urgent structural reforms to reposition the country’s economy for long-term growth, reduce dependence on external debt, and deepen domestic capital formation.
At the X-raying the Data: Insights from the Rebased GDP Data organised by the Nigeria Economic Summit Group (NESG), the trio of Teslim Shitta-Bey, Dr. Tope Fasua, and Professor Uche Uwaleke presented a series of strategic insights aimed at tackling Nigeria’s fiscal and developmental challenges.
The experts argued that Nigeria’s economic trajectory must shift from consumption-driven growth to a productivity-based model underpinned by robust data, prudent borrowing, domestic resource mobilization, and an inclusive capital market.
Teslim Shitta-Bey, Director Research at Proshare Nigeria, painted a sobering picture of the current economic landscape, identifying low productivity as a major drag on GDP growth. He noted that Nigeria’s economy has been disproportionately reliant on the services sector and household consumption, without corresponding growth in industrial or agricultural output.
Shitta-Bey warned that while short-term GDP growth projections may appear optimistic, the underlying drivers—such as consumption and remittance inflows—are unsustainable without a corresponding increase in domestic productivity. He attributed this gap to chronic underinvestment in education, healthcare, infrastructure, and innovation.
He also pointed to external vulnerabilities, especially the fluctuations in oil prices and their impact on foreign reserves and the naira. Nigeria’s economic volatility, he argued, is largely due to overexposure to global commodity cycles and lack of local value addition.
Dr. Tope Fasua, Special Adviser to the President on Economic Affairs, emphasized the need for a reorientation in public finance strategy. Rather than continuous external borrowing, he proposed leveraging the domestic money market more efficiently to raise funds for development.
He noted that Nigeria’s growing GDP—recently rebased to ₦373 trillion—provides additional borrowing headroom, but only if managed wisely. “We could have had a GDP closer to ₦500 trillion,” Fasua argued, “if sectors like digital services and e-commerce were fully accounted for.” He cautioned that conservative data understate Nigeria’s economic potential and therefore limit the country’s ability to negotiate development finance on better terms.
According to him, borrowing itself is not a problem if channeled into infrastructure and capital projects. He commended the shift towards rationalizing tax waivers and suggested that revenue reforms should focus on those with capacity to pay, rather than overburdening low-income earners and small businesses.
Dr. Fasua also flagged a potential hurdle to economic reforms—the reluctance of the National Assembly to approve asset sales. He described this legislative pushback as a stumbling block to unlocking capital from underutilized government assets.
Fasua stressed that accurate and timely data is essential for effective economic planning. He advocated for enhanced collaboration between the public and private sectors to improve data collection mechanisms, warning that delayed or inaccurate data compromises policy effectiveness.
Similarly, Professor Uche Uwaleke, Nigeria’s first professor of capital market studies, urged the government to prioritize formalizing large swathes of the informal sector, particularly in agriculture and small-scale manufacturing. He argued that formalization would not only improve tax collection but also open up new investment opportunities through listings on the Nigerian Stock Exchange.
Professor Uwaleke made a case for rethinking the structure of the domestic capital market. While the equities market is growing, he noted that it does not reflect the full breadth of Nigeria’s economic structure. “We need more companies from critical sectors like agriculture to be listed,” he said. “Only then can the stock market serve as a reliable mirror of the real economy.”
To fund infrastructure sustainably, Uwaleke called for a transition from general-purpose FGN bonds to infrastructure-tied bonds. These project-specific instruments, he argued, would ensure that borrowed funds are deployed transparently and efficiently, boosting investor confidence.
He also urged the government to reduce reliance on expensive commercial external loans, advocating instead for concessional loans with longer tenors and lower interest rates. This, he said, would lower Nigeria’s debt servicing burden, which is already crowding out capital expenditure.
While capital inflows are critical to Nigeria’s development, Uwaleke cautioned against overreliance on portfolio investments, which are often speculative and destabilizing. He urged the government to focus more on attracting Foreign Direct Investment (FDI), which brings in long-term capital, technology, and employment.
He argued that FDI in sectors like agriculture, energy, and digital infrastructure could catalyze real economic transformation. “Portfolio investments leave at the first sign of trouble,” Uwaleke said. “We need capital that stays, grows with us, and helps us build.”
Both Fasua and Uwaleke agreed that the country’s fiscal strategy should be recalibrated to support inclusive and sustainable growth. Fasua’s call for proactive data governance and efficient taxation complements Uwaleke’s push for capital market reform and infrastructure bonds.
Together with Shitta-Bey’s warnings about over-dependence on consumption and the need for productivity-led growth, the experts painted a comprehensive picture of the structural shifts required to steer the economy in a more resilient direction.
