The United Kingdom has expressed confidence in Nigeria's economic trajectory, citing President Tinubu's sweeping reforms as a catalyst for boosting investor confidence and transforming the country into a strategic hub for British trade and investment. Richard Montgomery, British High Commissioner to Nigeria, stated that these reforms are paying off, making Nigeria more investable.
*Key Reforms and Their Impact*
- *Abolition of Fuel Subsidies*: The abolition of fuel subsidies and unification of exchange rates have improved macroeconomic stability. The naira is now more stable, foreign exchange reserves are up, and predictability is returning to the market, enabling investment.
- *Increased Government Revenue*: According to the World Bank's latest economic update on Nigeria, government revenue has increased, fiscal deficits have reduced, and state-level funding has improved. Federal allocations to states have doubled, enabling more infrastructure and public service investment.
- *Growth in Bilateral Trade*: Trade between the UK and Nigeria now stands at £7.2 billion and is expected to grow under the Enhanced Trade and Investment Partnership (ETIP), a framework signed in 2024 to strengthen bilateral commercial ties.
*Positive Indicators*
- *GDP Growth*: Nigeria's GDP grew by 3.84% in the last quarter of 2024, with the Purchasing Managers Index climbing, pointing to expansion and job creation.
- *Investor Confidence*: The UK has removed tariffs on over 3,000 Nigerian export products, and UK firms are making ground-level impact, delivering clean energy projects, digitizing public health systems, and investing in education ¹.
*Challenges Ahead*
Despite these positive developments, challenges persist. Inflation remains high in the 20% territory, and it will take time to bring it down. The World Bank has approved a new financing package of $2.25 billion to help Nigeria stabilize its economy and scale up support to the poor and vulnerable.
*World Bank's Support*
The World Bank's support includes ²:
- *Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing Program (DPF)*: Providing immediate financial and technical support to Nigeria's urgent efforts to stabilize the economy and scale up support to the poor and most economically at risk.
- *Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR)*: Supporting Nigeria's ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services.
*Future Prospects*
With the right partnerships and support, Nigeria can achieve its long-term goal of a prosperous economy where jobs are created, and human development is significantly improved. The UK is committed to walking with Nigeria, step by step, in building lasting prosperity ¹.
