Policy reversals undermine Nigeria’s reform agenda, experts warn

Frequent policy reversals and weak coordination across government are undermining Nigeria’s reform efforts and damaging public trust, experts said on Saturday at the second edition of the Paul Alaje Colloquium 2025 held in Abuja.

They argued that long-term progress is impossible without credible, coherent and predictable policymaking.

The federal government on 13 November suspended import duty on fuel, a charge earlier approved by President Bola Ahmed Tinubu in October 2025. The duty had sparked concern across the oil and gas sector, with operators warning it would push up pump prices, fuel inflation and raise import costs. The measure was intended to encourage local refining and boost revenue.

Presenting a paper on economic transformation, Olufemi Shuaib, a Professor of Economics at the University of Lagos said Nigeria’s biggest challenge is that citizens no longer believe the authorities will implement what they announce.

He warned that ministries and agencies often take conflicting positions on the same issues, creating confusion and inconsistency.

According to him, even officials working on shared problems frequently operate in isolation. “Maintain your lane,” he said, has become a common internal instruction.

He noted that frequent leadership changes worsen the problem, leading to abrupt U-turns that disrupt planning.

“This week alone, about three policies were likely to be reversed… What signal are we sending when even the policies scheduled to start in January may not hold?” he asked.

He added that governments lose credibility when they withdraw decisions simply because groups complain, as it signals that policies were not properly planned.

Mr Shuaib said this weak credibility also reflects broader dysfunction. He pointed to unimplemented agreements with unions as an example of poor communication and broken commitments, saying this is why the academic sector frequently goes on strike.

He argued that policies should not be announced until the government has secured the necessary support because once announcements are made, “people react”.

He criticised the use of past revenue windfalls for palliatives rather than for building productive sectors, saying Nigeria has become an economy where people can spend but produce very little.

He also warned about the fiscal pattern in which the government anticipates higher revenue, expands spending and still ends up borrowing more.

He added that public funds often leak out of the economy through imports and capital flight, noting that “the economy suffers more when people earn money in Nigeria and take it abroad than when someone steals government money and uses it to develop his community”.

Mr Shuaib argued that Nigeria cannot rely solely on market forces because citizens are not yet empowered to fully participate.

He called for public-private partnerships in which government provides long-term, affordable financing while private actors handle operations.

He warned against excessive focus on digital technology at the expense of industrial capacity, saying manufacturing remains essential for absorbing labour in a country producing millions of graduates each year.

On the AfCFTA, he said trade without production is pointless and insisted that the agreement was shaped by external interests seeking access to African markets. “Until we produce, we cannot sell,” he said.

Diverging views

Moderating a panel on the paper, Nancy Nnaji said Africa remains home to nearly 500 million extremely poor people, including 133 million Nigerians living in multidimensional poverty.

She said other emerging economies have shown that disciplined planning and clear priorities can drive economic transformation. She asked the panellists how Nigeria can institutionalise policy coherence to sustain long-term reforms.

Responding, the Specisl Adviser to the President on Economy Affairs, Tope Fasua, said Nigeria often avoids deep, comprehensive discussions because of a culture of short attention spans.

He warned that the country cannot assume it will automatically lead Africa, pointing to Morocco, Egypt, Côte d’Ivoire and Guyana as examples of nations advancing at a faster pace. Nigeria, he said, must be “alarmed” by the widening gap.

Mr Fasua argued some of the data used in the presentation were inaccurate, insisting that Nigeria recorded trade surpluses of N12 trillion in the first half of this year and N16 trillion last year.

He added that the new tax measures would reduce the burden on low-income earners and small businesses, noting that individuals earning N1 million or less annually and SMEs with revenue under N50 million will pay no taxes.

He acknowledged that policy reversals can unsettle investors but argued that they sometimes reflect a government that listens.

He said adjustments based on feedback should not be seen as weakness, adding: “The ram steps back in order to find power.” Mr Fasua also said Nigeria’s global image has been shaped by negative external narratives and called for stronger national branding, including a return to promoting the country on international platforms such as CNN.

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Poverty reality

Ms Nnaji disagreed that negative perceptions alone were driving investor concerns. She said Nigeria is experiencing real hardship, with rising food inflation and visible poverty even in areas like Maitama.

She cited the World Bank’s Nigeria Development Update, which shows that more Nigerians are being pushed into poverty.

She added that comparing Nigeria to countries such as the United States can be misleading because those countries still have functioning institutions and predictable systems.