Voters in Nigeria will head to the polls this month amid a mounting debt crisis, runaway inflation, worsening insecurity, and extreme poverty. To reverse these trends, Nigeria’s new government must confront entrenched vested interests and embark on long-overdue constitutional and economic reforms.
WASHINGTON, DC – Nigeria’s election on February 25 might be its most critical since independence in 1960. After eight years of turmoil under outgoing President Muhammadu Buhari, the next government has an opportunity to embark on necessary and long-overdue reforms that, if done right, could usher in an era of explosive – and, one hopes, inclusive – economic growth.
The election comes at a difficult time for Africa’s most populous country and largest economy. Nigeria is in the midst of a mounting debt crisis, with 100% of the country’s revenues going toward servicing its nearly $200 billion national debt, implying more borrowing to finance current spending. Inflation is at 21%, owing in part to a chronic dollar shortage, and exacerbated by large-scale theft of the crude oil that accounts for more than 90% of its foreign-exchange earnings. Unemployment is at 33%, with more than half of Nigeria’s young people currently unemployed.
This grim economic reality, together with the constant threat of terrorism and separatist violence, has led to a sharp decline in productivity, intensifying Nigeria’s already acute poverty crisis. With 20 million school-age children out of school and 133 million of its 219 million people living in multidimensional poverty, wasteful subsidies on refined petroleum imports prevent the government from making the investments in education and health required to achieve sustainable economic growth.
WASHINGTON, DC – Nigeria’s election on February 25 might be its most critical since independence in 1960. After eight years of turmoil under outgoing President Muhammadu Buhari, the next government has an opportunity to embark on necessary and long-overdue reforms that, if done right, could usher in an era of explosive – and, one hopes, inclusive – economic growth.
The election comes at a difficult time for Africa’s most populous country and largest economy. Nigeria is in the midst of a mounting debt crisis, with 100% of the country’s revenues going toward servicing its nearly $200 billion national debt, implying more borrowing to finance current spending. Inflation is at 21%, owing in part to a chronic dollar shortage, and exacerbated by large-scale theft of the crude oil that accounts for more than 90% of its foreign-exchange earnings. Unemployment is at 33%, with more than half of Nigeria’s young people currently unemployed.
This grim economic reality, together with the constant threat of terrorism and separatist violence, has led to a sharp decline in productivity, intensifying Nigeria’s already acute poverty crisis. With 20 million school-age children out of school and 133 million of its 219 million people living in multidimensional poverty, wasteful subsidies on refined petroleum imports prevent the government from making the investments in education and health required to achieve sustainable economic growth.