Giant No More: Nigeria’s Descent into Economic Chaos

 

Nigeria's transition from Africa’s "Giant" to a shadow of its former self is a sobering reminder of how swiftly a nation can unravel in the face of corruption and poor governance. Once a land of opportunity, Nigeria's soaring unemployment and crumbling industries have forced millions into poverty, leaving behind a country defined by desperation and insecurity.

Nigeria, once hailed as the "Giant of Africa," now finds itself entangled in a dire economic quagmire. The country, once bustling with jobs, industries, and a strong currency, has witnessed a steady decline since the golden years following its independence in 1960. The discovery of oil in the Niger Delta, which propelled Nigeria to the heights of economic success, now appears more a curse than a blessing, with the economy today resembling a shattered mirror, each piece reflecting the fragments of a once-thriving nation.

In the years following its independence, Nigeria was a symbol of progress and prosperity in Africa. The economy was bolstered by a diverse array of industries, from agriculture to manufacturing, and later oil. Its currency, the naira, was strong; infrastructure projects were robust, and the nation’s institutions were relatively stable. So powerful was Nigeria’s allure that people from other African countries sought refuge in its opportunities, much like they do today with the United States or Europe. In those years, Nigeria seemed to be the ultimate land of opportunity—a promise of prosperity amid the wider struggles of the continent. But the bubble burst.

By the late 1970s, corruption had seeped into every crevice of Nigeria's governance. With the rise of military coups and prolonged periods of military rule, the country’s economic and political fabric began to fray. The influx of oil wealth, which should have been reinvested into developing the country’s infrastructure and human capital, instead fostered a culture of embezzlement and financial mismanagement. Billions of dollars from oil revenue were siphoned off into private bank accounts, while the country was left to deteriorate.

Under successive civilian administrations, the trend continued. Despite brief moments of reform and optimism, such as during President Olusegun Obasanjo’s tenure from 1999-2007, corruption persisted as the defining feature of Nigeria’s political and economic landscape. Infrastructure projects were initiated but left incomplete. Factories closed as industrial policies failed, and the nation's agricultural sector collapsed under the weight of neglect and government mismanagement. By the time President Muhammadu Buhari assumed power in 2015, Nigeria had not only lost its status as Africa’s economic powerhouse, but it had become an exemplar of how corruption and poor governance could derail a nation.

Today, Nigeria’s economy is a stark contrast to what it once was. The country grapples with a poverty rate of over 46%, with an estimated 87 million people living below the poverty line, making Nigeria the nation with the second-highest number of people in extreme poverty in the world. Unemployment remains at staggering levels, hovering around 33%, with youth unemployment even higher. Many factories that once dotted the landscape of major cities like Lagos, Kano, and Port Harcourt have closed down, contributing to a loss of jobs and a rise in crime. In the absence of jobs, young Nigerians are increasingly drawn to cybercrime, banditry, and kidnapping, further destabilizing the country.

The naira, once one of the strongest currencies in Africa, has now become a shadow of its former self. The exchange rate has plummeted from 461 naira to the US dollar in 2022 to nearly 1000 naira to the dollar by the end of 2023, with predictions that it could depreciate further if current economic policies are not adjusted. Inflation, driven by a combination of factors including currency depreciation, the removal of fuel subsidies, and insecurity in key agricultural regions, hit a 24-year high of 31.7% in early 2024. For the average Nigerian, this means that basic commodities like food, fuel, and transportation have become almost unaffordable. Food inflation alone remains above 30%, a figure that highlights the widespread economic hardship facing millions of Nigerians.

Insecurity compounds these economic issues. Terrorist groups such as Boko Haram and insurgents in the northeast, bandits in the northwest, and separatist agitations in the southeast have severely hampered economic activity across large swaths of the country. The oil-rich Niger Delta, once the backbone of Nigeria’s economy, continues to be plagued by oil theft, vandalism, and militant attacks on pipelines and refineries. As a result, oil production—a key source of government revenue—has dwindled, further straining the economy.

President Bola Tinubu, who assumed office in 2023, inherited this fractured economic landscape. His administration has introduced a series of reforms aimed at stabilizing the economy, such as the removal of the costly fuel subsidy and the unification of the exchange rate. These reforms, while necessary, have caused immediate hardship for many Nigerians. The removal of the fuel subsidy led to a spike in petrol prices, which in turn increased the cost of transportation, production, and goods. Although the government has introduced cash transfers to mitigate the effects of these reforms on the most vulnerable, these efforts have done little to ease the burden on a population already pushed to the brink.

Looking ahead, Nigeria’s path to recovery remains uncertain. While some economists predict a marginal improvement in GDP growth in 2024 due to increased oil production and foreign investment, this growth will likely be slow and uneven. Structural reforms—particularly in areas such as education, healthcare, and job creation—are essential if Nigeria is to lift its millions of citizens out of poverty and restore its standing in Africa and the world. However, with rising insecurity, inflation, and public discontent, the country’s leaders face an uphill battle.

Indeed, what Nigeria’s story teaches the world is how early progress without a firm and disciplined government can be rapidly undone. Today’s Nigeria is a cautionary tale of squandered wealth and opportunities, a giant laid low by decades of corruption and mismanagement. As Nigeria continues to tread this uncertain path, one cannot help but wonder whether the so-called "Giant of Africa" will ever rise to its feet again, or whether it will forever be remembered as the land where even the oil ran dry—not just from the ground but from the pockets of the people.