Nigeria’s Reforms: World Bank Praise vs. Governance Concerns | Kingsley Moghalu
Nigeria’s foreign reserves have reached $46 billion, the highest level in a decade, even as concerns mount that the country’s economic reforms under President Bola Tinubu may prioritize short-term macroeconomic gains over sustained human development, according to analysts.
Kingsley Moghalu, former Deputy Governor of the Central Bank of Nigeria and President of the Institute for Governance and Economic Transformation (IGET), cautioned that without fundamental changes in governance – specifically accountability, transparency, and the rule of law – the reforms risk becoming “a well-funded mask for governance decay.” Moghalu’s assessment comes despite recent commendations from the World Bank for Nigeria’s macroeconomic reforms.
The Tinubu administration has undertaken significant economic changes, including the removal of fuel subsidies and measures to stabilize the naira. While the Central Bank has reported successes in stabilizing the exchange rate and curbing inflation, the tangible benefits for ordinary Nigerians remain limited. The removal of fuel subsidies, implemented with what critics describe as insufficient planning for alternative mass transit and social safety nets, has increased economic hardship for many. The federal savings generated have yet to translate into visible improvements in essential services like healthcare, education, and access to safe drinking water.
According to the World Bank’s Human Capital Index, a child born in Nigeria today has only a 36% chance of achieving their full productive potential. The country ranks 140 out of 180 on Transparency International’s Corruption Index and 164 out of 193 on the UN Human Development Index. Only 32% of Nigerians have access to safe drinking water.
Moghalu argues that structural transformation, rather than solely focusing on macroeconomic indicators, is the key to sustainable development. He points to the success stories of Southeast Asian nations like Singapore, Malaysia, and Indonesia, which paired economic liberalization with rigorous behavioral reforms to achieve lasting growth. Nigeria’s economy remains heavily reliant on oil, with the manufacturing sector contributing only 8–10% of GDP. Electricity supply remains a significant constraint, currently at roughly 5,000MW – far below the level needed to support industrial productivity.
Recent borrowing from the World Bank underscores the country’s financial reliance on external lenders. The Tinubu administration has borrowed $6.45 billion from the World Bank in the last 16 months, bringing the total amount of loans approved by the World Bank to Nigeria over the past five years to $24.088 billion. The World Bank recently approved $1.57 billion in new loans for Nigeria, targeting critical sectors including power, women’s empowerment, girls’ education, and renewable energy. These loans include $750 million for the power sector, $500 million for women’s empowerment, and $700 million for enhancing girls’ education.
Moghalu urges a shift away from what he calls a “growth delusion” towards a development strategy grounded in transparency, accountability, and citizen-centered policies. He contends that only a foundation built on these principles can unlock Nigeria’s potential and deliver tangible prosperity.
The World Bank has not yet responded to requests for comment on Moghalu’s criticisms.