President Bola Tinubu’s declaration that Nigeria will target 7% annual economic growth by 2027 is as bold as it is fraught with challenges.
The plan is tied to a larger ambition—quadrupling the economy by 2030 and lifting millions out of poverty—but current trends suggest the target may be more aspirational than attainable.
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Nigeria’s growth has been sluggish for over a decade, struggling to stay above population growth rates of about 2.5%–3%.
The first quarter of 2025 brought GDP growth of just 3.13%, even after a GDP rebasing boosted the economy’s official size to ₦372.822 trillion ($243.55 billion). This is far from the growth acceleration needed to reach Tinubu’s goal.
The World Bank’s more modest forecast—3.6% in 2025 and 3.8% in 2027—exposes the gap between official ambition and external expectations.
Since taking office in 2023, President Tinubu has pursued aggressive reforms, including ending petrol and electricity subsidies, and twice devaluing the naira, in a bid to unlock long-term growth. While these moves have improved macroeconomic stability on paper and may have boosted investor confidence, they have also unleashed the sharpest cost-of-living crisis in a generation, with inflation eating into household incomes and dampening domestic demand.
At Wednesday’s Federal Executive Council (FEC) meeting, the president identifies low public savings and investment as key constraints. Public investment stands at just 5% of GDP, well below levels seen in fast-growing economies. Tinubu’s instruction to review revenue retention and deductions from the federal account points to an awareness of fiscal leakages.
For example, under the Petroleum Industry Act, the national oil company NNPC retains 30% of certain revenues and profits, a practice critics say drains public coffers and perpetuates inefficiency. Without addressing such structural issues, Nigeria’s fiscal room for the infrastructure and social spending needed to spur higher growth will remain limited.
To reach 7% growth, Nigeria would need a sustained surge in investment, both public and private, alongside productivity gains in sectors like manufacturing, agriculture, and technology. That, in turn, requires reliable energy, efficient transport infrastructure, policy consistency, and stronger institutions. The current reform path may lay some groundwork, but the political and social costs of further painful measures could slow momentum.
The numbers are telling: jumping from under 4% to 7% growth within two years would require more than doubling the pace of expansion in an economy still grappling with currency volatility, high borrowing costs, and insecurity in key agricultural and industrial regions.
Also, critical economic numbers complicate the president’s targets. In the Q1 2025 capital importation report, the National Bureau of Statistics (NBS) reported that only five states and the Federal Capital Territory (FCT) attracted foreign investors in the whole of 2024. That means, in a year that saw a dramatic 215 percent surge in foreign capital inflows into Nigeria, rising from $3.91 billion in 2023 to $12.32 billion in 2024, 31 of the country’s 36 states were completely sidelined. That is not a recipe for a spike in economic growth.
No doubt, President Tinubu’s 7% target is a rallying cry for transformation, but unless fiscal reforms translate quickly into higher investment and productivity, the country risks another cycle of big promises meeting modest results. For now, the World Bank’s projections may prove a more sober benchmark than the president’s vision.
Tinubu deserves credit for stabilising economy — Okonjo-Iweala
Nevertheless, the president’s reforms have received high praise from critical leaders. On Thursday, the Director-general of the World Trade Organisation (WTO), Ngozi Okonjo-Iweala, President Bola Tinubu must be given credit for stabilising the economy.
Speaking during a courtesy visit to Tinubu at the Presidential Villa, she said what is needed next in the country is economic growth.
“So we think that the president and his team – and we just exchanged with him – have worked hard to stabilize the economy. And you cannot really improve an economy unless it’s stable,” Okonjo-Iweala said.
“So the reforms have been in the right direction. What is needed next is growth,” she said.
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“We now need to grow the economy and we need to put in social safety nets so that people who are feeling the pinch of the reforms can also have some support to be able to weather the hardship. So that’s the next step.”
Philip Ibitoye is a Special Correspondent with EKO HOT BLOG. Click here to find daily analysis and critical insight on trending issues in Lagos and other parts of Nigeria.
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