No Hope In sight As Experts Warn of Prolonged Economic Hardship Until 2027

Amidst a growing storm over surging fuel prices, economic and financial experts are painting a grim picture of Nigeria’s short- to medium-term future. With petrol now priced between N900 and N1,200 per litre, they predict that relief from the current economic crisis may not come until 2027, barring significant changes in government policy.

Despite repeated promises from the Federal Government to deliver a turnaround soon, experts remain doubtful. They warn that without urgent interventions, Nigeria’s economic challenges may continue well beyond 2027.

The recent spike in fuel prices, coming on the back of a seven-week-long scarcity, has triggered renewed concerns about inflation, unemployment, and a sharp decline in the standard of living. Economists note that the situation is compounded by falling oil revenues.

Nigeria’s key crude oil grade, Bonny Light, recently dropped to $73 per barrel, its lowest level this year. With Nigeria’s budget based on an oil price of $77 per barrel, the country faces an uphill battle to meet its fiscal targets.

Oil production is also falling short. Nigeria has struggled to produce even 1.4 million barrels per day (mbpd) in 2024, far below the budgeted 1.7 mbpd. This shortfall, combined with declining oil prices, has left the economy in a perilous state, with external reserves dropping by $500 million in August alone.

These developments have piled pressure on the Naira, which fell to N1, 630 to the U.S. dollar this week, intensifying imported inflation.

Analysts believe these conditions will make economic recovery difficult, predicting that real progress may not be seen for at least two to three years if the government addresses key issues like inflation control, currency stabilization, and boosting local production.

However, there is skepticism about the government’s approach. Prof. Uche Uwaleke, President of the Association of Capital Market Academics of Nigeria (ACMAN), cautioned that no turnaround should be expected in the next two years due to deep-rooted structural challenges in the power and petroleum sectors.

David Adonri, Vice Chairman of Highcap Securities, expressed similar concerns. He argued that the government’s economic reforms are misguided, as they focus on demand management without tackling inefficiencies in public spending or addressing rural insecurity, which continues to hamper agricultural productivity.

Small business owners are also feeling the pinch. Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria (ASBON), called for a complete overhaul of the government’s economic team, noting that rising costs and shrinking disposable incomes are pushing businesses to the brink.

Toyin Sanni, CEO of Emerging Africa Capital Group, agreed that while the government’s reforms are bold, their success depends on better policy coordination, improved infrastructure, and investment in key sectors like agriculture and technology. She warned that visible improvements might not materialize until 2025 or 2026.

As Nigeria grapples with this economic crisis, experts agree on one thing: without immediate and strategic action, the recovery will be slow, and the hardship may persist far longer than anticipated.