World Bank Warns FG Not to Reverse Current Economic Reforms

The World Bank has advised the federal government not to reverse the ongoing economic reforms, cautioning that such a move could have detrimental consequences for Nigeria’s economy.

Key policies introduced by President Bola Tinubu’s administration on its first day in office include the removal of fuel subsidies and the unification of multiple foreign exchange systems. While the federal government has defended these reforms as essential for the country’s long-term stability, many Nigerians have expressed concerns over their immediate impact, particularly on the cost of living.

The pump price of fuel, which was ₦198 per litre before the subsidy removal, has skyrocketed to over ₦1,000. Additionally, the naira, which previously traded at under ₦600 to the dollar, now exchanges for over ₦1,700 in the parallel market.

Speaking at the launch of the Nigeria Development Update (NDU) report in Abuja on Thursday, the World Bank Country Director for Nigeria, Dr. Ndiame Diop, acknowledged the hardship caused by the reforms but stressed their necessity. He warned that reversing the policies would be catastrophic for the nation.

“Reversing these reforms would be detrimental and would spell doom for Nigeria,” Diop stated.

Echoing this sentiment, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, reiterated the government’s commitment to maintaining the reforms. He emphasized that any effort to abandon the current course would undermine the progress made.

“Any effort that is not sustained will be a waste. Together with the Governor of the Central Bank of Nigeria and the Minister of Budget and National Planning, we’ve been discussing how to stay on course, tackle inflation, and ensure we move in the right direction,” Edun explained.

He further highlighted the government’s focus on reducing inflation and attracting investments to critical sectors, particularly industry, to create jobs and stimulate economic growth.

This is not the first time the World Bank has taken a strong stance on Nigeria’s reform agenda. At the 30th Nigerian Economic Summit (NES30) held in Abuja last week, World Bank Senior Vice President and Chief Economist, Mr. Indermit Gill, urged the Tinubu administration to remain committed to the reforms, despite the current challenges. He suggested that Nigeria could establish itself as a leading economic power in sub-Saharan Africa and on the global stage over the next 10 to 15 years if the policies are sustained.

However, not everyone agrees with this perspective. Andrew Mamedu, Country Director of ActionAid Nigeria, criticized Gill’s comments, describing them as insensitive to the millions of Nigerians enduring severe economic hardship.