Economy

By Inusa Rabiu Isah

As tensions continue to rise around the Strait of Hormuz, global oil prices are climbing again, shipping risks are increasing, and analysts are warning that any prolonged disruption in the Gulf region could trigger another major energy shock. For many Nigerians, the immediate reaction is predictable: “Nigeria will benefit because we are an oil-producing country.” Yet every major oil shock continues to expose the same uncomfortable reality: despite its enormous crude oil reserves, Nigeria remains dangerously vulnerable to global energy instability.

The Strait of Hormuz, located between Iran and Oman, is one of the world’s most strategic energy transit routes. According to the International Energy Agency (IEA), about 20 million barrels per day of crude oil and petroleum products passed through the Strait in 2025, representing roughly one-fifth of global oil consumption and nearly 25% of global seaborne oil trade. In addition, the United States Energy Information Administration (EIA) reports that around 20% of global LNG trade moves through the same corridor.

This explains why instability around Hormuz immediately affects global energy markets. The concern extends beyond crude supply to tanker movements, shipping insurance, freight costs, refinery feedstock availability, refined product pricing, and market speculation.

Similarly, past disruptions such as the 1973 oil embargo, the Gulf Wars, and the 2022 Russia–Ukraine conflict demonstrated how geopolitical instability can rapidly trigger inflation across import-dependent economies through higher fuel, transport, and food costs.

Nigeria is no exception.

Although Nigeria is one of Africa’s largest crude oil producers, the country still operates an economy heavily dependent on imported energy-linked systems. Millions of households and businesses rely on petrol and diesel generators due to an unstable electricity supply, while transport and logistics remain overwhelmingly road-dependent. Consequently, rising diesel and petrol prices quickly spread across the economy.

The first major mistake in many public discussions is the assumption that higher crude prices automatically benefit Nigeria. Oil revenue depends not only on price, but also on production volume.

According to Nigerian Upstream Petroleum Regulatory Commission (NUPRC) data released in April 2026, Nigeria’s combined crude oil and condensate production rose to about 1.546 million barrels per day in March 2026. However, crude oil production excluding condensates stood around 1.382 million barrels per day, still below Nigeria’s OPEC quota of approximately 1.5 million barrels per day.

Therefore, higher crude prices alone cannot guarantee stronger economic benefits unless production remains stable, oil theft is reduced, and export infrastructure functions efficiently.

The second mistake is confusing crude oil price with petrol price. Nigerians do not buy crude oil at filling stations; they buy refined petroleum products. Petrol and diesel prices are influenced not only by crude benchmarks but also by refining margins, freight charges, foreign exchange rates, logistics, taxes, insurance, and marketer margins.

This is where Nigeria’s foreign exchange challenge becomes critical. A weaker naira significantly increases the cost of refined products and energy-related imports. Since the removal of fuel subsidies, domestic fuel prices now respond more directly to global market volatility. Consequently, international oil shocks now transmit faster into local petrol and diesel prices.

Although the Dangote Refinery represents a major improvement in Nigeria’s downstream petroleum sector, local refining alone cannot completely shield the country from global oil-price volatility. Crude feedstock pricing remains internationally linked, and refined product prices still respond to international market conditions. Nonetheless, the refinery remains a critical step toward improving Nigeria’s long-term energy security and reducing import dependence.

Recent domestic fuel data already show how exposed Nigeria’s economy remains. National Bureau of Statistics (NBS) data indicated that the average retail petrol price rose to about ₦1,288.54 per litre in March 2026, while diesel prices recorded an estimated 16.05% month-on-month increase during the same period.

These are not just economic statistics. They affect transport fares, food prices, manufacturers, small businesses powering generators, and millions of Nigerians already struggling with inflation.

Meanwhile, Nigeria’s deeper challenge remains structural energy vulnerability. Electricity supply is weak, gas infrastructure is underdeveloped, rail freight systems are limited, and strategic fuel reserves are inadequate. Under these conditions, every major disruption in global energy markets quickly evolves into domestic inflation and economic hardship.

The policy lesson is therefore clear: Nigeria must stop celebrating rising oil prices without asking whether the country is structurally prepared to benefit from them. Nigeria must raise and sustain crude oil production, strengthen domestic refining, expand gas infrastructure, develop strategic fuel reserves, and treat energy security as an economic-security issue rather than merely a petroleum-sector issue.

Conclusively, the Strait of Hormuz may be geographically distant from Nigeria, but its economic consequences can reach Nigerian households within days. That is the reality of today’s interconnected global oil market. Until Nigeria builds real energy resilience, global oil shocks will continue producing the same painful irony: a country rich in crude oil, yet perpetually vulnerable to energy insecurity and affordability.

Engr. Inusa Rabiu Isah, GMNSE, MIAENG, is a petroleum engineer and energy analyst with interests in petroleum economics, energy security, and sustainable industrial development. He writes from Abuja and can be reached via inusarabiuisah@gmail.com.

By Sabiu Abdullahi

Tony Attah, the Chief Executive Officer and Managing Director of Renaissance Africa Energy Company, has said about 100,000 Nigerians die every year because they do not have access to cleaner energy sources.

Attah spoke on Thursday at the Africa CEO Forum held in Kigali, Rwanda. He said the situation extends across the continent, where more than 400,000 deaths are linked to poor access to cleaner energy.

He stressed the importance of natural gas to Africa’s electricity sector and described cleaner energy as critical to improving living conditions across the continent.

“When you look in Nigeria, 100,000 people die every year from lack of access to cleaner energy. Just look at that poor woman who is trying to put food on the table, and she has to cook through the smoke, using poor quality fuels, walking in and out of that every day,” he said.

“Think about it. One child on the left, one on her right, one on her back. They go in day in (and) day out. That is where your 100,000 people come from. The overall number for Africa is more than 400,000.”

Attah said Africa should not accept such statistics despite its huge gas reserves.

“That’s not the narrative that you should feel proud of as an African, that’s not the narrative that you should feel proud of as somebody in the industry that says we have 620 tcf of gas that can provide life,” he said.

“Essentially, gas is life, and that’s how Africa has to see gas. And if we as producers see it that way, we now need to get that same logic to the minds of the leadership, because integration is what has to happen in Nigeria.”

The energy executive also urged African countries to invest in their own natural resources instead of relying heavily on foreign financiers.

According to him, Nigeria’s electricity supply remains inadequate for its population of more than 200 million people.

“If you look at Nigeria, we have over 200 million people. The total spinning reserves of electricity is under 20 gigawatt. And what is available for the population is about five. So 5,000 megawatt for 200 million people,” he said.

“Of course, there are millions of generators all over the place. But no economy can take off on the back of diesel generators. In the same vein, no economy should expect to take off on the balance sheet of others.”

Attah argued that Africa must reclaim financial resources tied up abroad if the continent hopes to fund its own development.

“So those $4-$5 trillion that Amaodu referenced, that is sitting elsewhere but belongs to Africa, has to come back, and that is how Africa will start to take centre stage in financing itself,” he said.

“You can’t keep expecting people to want to finance you and then you want to lead them or you want to stand up to them — you must be subservient if someone is financing you. As they say, who pays the piper dictates the tune.”

He further called for a shift from exporting raw gas to using the resource to create economic value within Africa.

Also speaking at the forum, Chairman of McKinsey Africa, Acha Leke, said Africa possesses about 10 per cent of the world’s proven gas reserves and could sustain production at current levels for another 70 years.

Despite this, he noted that only three per cent of gas produced on the continent is traded within Africa.

Leke said 34 per cent of African gas is exported outside the continent, while most of the gas consumed within Africa is concentrated in Algeria, Nigeria, Egypt and Libya.

According to him, the continent’s gas infrastructure was designed mainly for exports rather than for regional distribution and trade.

By Ahmed Usman

In the years following independence, Northern Nigeria stood at the forefront of the country’s economic progress. The region’s agricultural output, symbolised by the famous groundnut pyramids of Kano and by thriving cotton production across the savannah belt, powered employment, export earnings, and real-sector development. For a time, Northern Nigeria was not only a major driver of Nigeria’s economy but also one of the most economically vibrant regions on the African continent. Today, however, the region finds itself at a critical crossroads.

Over the past two decades, Northern Nigeria has faced a combination of security, economic, and structural challenges that have slowed its development trajectory. The rise of insurgency in the North-East, banditry and cattle rustling in parts of the North-West, and persistent farmers–herders conflicts have disrupted livelihoods, weakened agricultural production, and discouraged investment. These crises have inflicted enormous human and economic costs not only on the region but also on the Nigerian economy as a whole.

Yet security challenges alone do not explain the region’s economic difficulties. The deeper problem lies in the failure to convert the region’s extraordinary demographic and natural advantages into sustained economic growth.

Northern Nigeria possesses some of the most significant development assets in the country. The region accounts for more than 60 per cent of Nigeria’s population and contains over 80 per cent of the country’s arable land. It also receives abundant sunlight, suitable for solar power generation, and hosts numerous dams capable of supporting large-scale irrigation and energy production.

Despite these advantages, the region continues to record some of Nigeria’s most troubling development indicators. Poverty levels remain among the highest in the country. Youth unemployment is widespread. The region also accounts for about 20 million out-of-school children, one of the highest figures worldwide. Internally generated revenue in many northern states remains low, limiting the fiscal capacity needed to finance development.

This paradox of abundant resources alongside persistent poverty highlights the urgency of a new development strategy to transform its demographic advantages into a true demographic dividend.

At the heart of the solution lies the revival of the real sector. For too long, Nigeria’s growth model has leaned heavily on the service sector and oil revenues, sectors that generate limited employment relative to the country’s rapidly expanding workforce. Each year, millions of young Nigerians enter the labour market, yet the economy struggles to create sufficient productive jobs. Sustainable and inclusive growth will require renewed investment in sectors capable of generating large-scale employment. Agriculture, agro-processing, manufacturing, and renewable energy stand out as areas where Northern Nigeria holds a natural comparative advantage.

Agriculture in particular offers a powerful pathway for economic transformation. With vast fertile land and favourable climatic conditions, the region has the potential to become Nigeria’s primary agricultural hub once again. Expanding irrigation farming, adopting modern agricultural technologies, improving access to inputs, and strengthening agricultural value chains could dramatically increase productivity while generating millions of rural jobs. But agriculture alone will not be enough. The next stage of development must focus on building strong agro-industrial linkages. Processing agricultural products locally rather than exporting raw commodities can significantly increase value addition, stimulate rural industries, and expand export opportunities.

Infrastructure will be critical to unlocking these opportunities. Reliable electricity, modern road networks, efficient storage systems, and improved logistics are essential for connecting farmers, manufacturers, and entrepreneurs to national and global markets. The region’s extensive dam infrastructure already provides enormous potential for irrigation agriculture and renewable energy if properly utilised.

Equally important is the need to invest in human capital. Northern Nigeria’s youthful population represents one of the region’s greatest assets, but only if young people are equipped with the education, skills, and opportunities needed to participate in a modern economy. Expanding access to quality education, strengthening vocational training, and promoting the development of technical skills must become central pillars of the region’s development strategy.

Yet economic progress ultimately depends on the strength of institutions. Transparent governance, accountable public institutions, and a regulatory environment that encourages private investment are essential for sustainable development. Reducing bureaucratic barriers, strengthening property rights, and improving the ease of doing business will be critical for attracting both domestic and foreign investment.

History shows that development trajectories can change when policy direction aligns with economic potential. Northern Nigeria once played a central role in powering Nigeria’s economic progress. There is no reason it cannot do so again.

The challenges facing the region are significant, but they are not insurmountable. With strategic investments, stronger institutions, and a renewed focus on the real sector, Northern Nigeria can unlock the immense potential of its land, its resources, and most importantly, its people. The region’s future should not be determined by the weight of its challenges but by the boldness of its choices. If those choices are made wisely, Northern Nigeria could once again emerge as one of the most powerful engines of economic growth in the country and perhaps on the continent.

By Daniel Nduka Okonkwo

Nigeria’s debt clock has surged to ₦159.28 trillion, a figure that translates to roughly ₦724,000 per citizen when spread across a population of more than 220 million. This arithmetic alone underscores the scale of the nation’s obligations. While official voices emphasise that the debt-to-GDP ratio remains within accepted thresholds, the underlying reality is sobering: the country’s current account is being financed through persistent domestic borrowing and mounting external debt. Each statistic is a reminder that today’s fiscal gaps are tomorrow’s responsibilities, with the burden of development increasingly shifted onto generations yet unborn.

Is there a way out for Nigerians? The path forward demands more than borrowed billions. It requires a fundamental reassessment of how resources are managed, how revenue is diversified, and how structural weaknesses are addressed. While the figures may suggest sustainability on paper, the lived reality reflects rising costs, shrinking opportunities, and a future increasingly tied to creditor obligations. Breaking this cycle will require bold reforms, transparent governance, and a commitment to building an economy driven by productivity rather than dependence on borrowing.

When distributed across the population, the debt translates to roughly ₦700,000 to ₦725,000 per citizen. This figure is only a statistical illustration and not a legal obligation on individuals. Public debt remains a sovereign responsibility shared by the Federal Government, state governments, and the Federal Capital Territory, and it is serviced through public revenue rather than direct payments by citizens.

As of late 2025, Nigeria’s total public debt stood at approximately ₦159.28 trillion, equivalent to about $103 billion to $111 billion depending on the exchange rate applied. This represents an increase from about ₦144.7 trillion in 2024, reflecting continued reliance on borrowing to finance fiscal deficits.

Nigeria’s debt stock consists of both domestic and external borrowing. Domestic debt is estimated at ₦84-₦85 trillion, while external debt stands at ₦74 trillion. Persistent budget deficits have driven the growth in total debt, increased domestic borrowing through treasury bills and government bonds, and led to exchange rate depreciation, raising the value of the naira against external obligations. By mid-2025, total debt had reached about ₦152.39 trillion before rising further to ₦159.28 trillion by year-end.

Debt servicing remains a more pressing concern than the size of the debt itself. In 2025, debt servicing costs rose to approximately ₦15.8 trillion, up from about ₦12.8 trillion in 2024. Higher interest rates on domestic debt instruments largely drove this increase. Servicing costs for domestic debt rose sharply due to increased yields on treasury bills and Federal Government bonds. At certain points in 2025, the debt service-to-revenue ratio exceeded 80 per cent, meaning that a substantial portion of government revenue was used to service existing debt.

Looking ahead, Nigeria’s 2026 fiscal outlook reflects continued pressure on public finances. The proposed budget projects total expenditure of about ₦58.5 trillion against expected revenue of approximately ₦33.2 trillion, leaving a fiscal deficit of about ₦25 trillion. This gap is expected to be financed largely through additional borrowing, which could push total public debt beyond ₦160 trillion.

Planned borrowing includes external loans estimated at $6 billion, along with an additional $516 million under consideration. However, claims suggesting approvals equivalent to ₦68 trillion appear inconsistent and are likely the result of conversion or reporting errors rather than actual borrowing approvals.

The comparison between Nigeria’s per capita debt of roughly ₦724,000 and the national minimum wage of ₦70,000 is largely symbolic but highlights deeper economic realities. It reflects low-income levels, rising cost of living, and mounting pressure on public finances. It does not imply that citizens are personally responsible for repaying the debt.

Nigeria’s debt-to-GDP ratio, estimated at 35 per cent to 37 per cent, remains below the commonly referenced 60 per cent threshold. However, experts consistently stress that revenue constraints, rather than debt size alone, represent the country’s most significant fiscal risk.

Key concerns include the high share of revenue devoted to debt servicing, limited fiscal space for critical sectors such as infrastructure, health, and education, and potential inflationary risks if deficit financing continues to expand. Exchange rate volatility also affects the dollar value of external debt, adding further complexity to fiscal management.

Nigeria’s public debt, now approaching ₦160 trillion, is not excessive relative to GDP. However, the cost of servicing that debt and the country’s limited revenue base present a growing fiscal challenge. The per capita framing helps illustrate the scale of the burden, but the central issue remains how effectively borrowed funds translate into economic growth and improved living conditions.

As borrowing continues, the sustainability of Nigeria’s fiscal path will depend less on the amount owed and more on how effectively the economy generates the revenue required to support those obligations.

Daniel Nduka Okonkwo is a Nigerian investigative journalist, publisher of Profiles International Human Rights Advocate with Daniels Entertainment, a policy analyst, and human rights activist. He writes from Nigeria and can be reached at dan.okonkwo.73@gmail.com.

By Ishaka Mohammed

A son-in-law of Aliko Dangote, Captain Jamil Abubakar, has raised multimillion naira to support entrepreneurs in northern Nigeria. Captain Jamil, a pilot, is the son of former Inspector-General of Police Mohammed Dikko Abubakar.

On March 21, 2026, Captain Jamil tweeted his wish to attract investors to Arewa businesses, and by the end of the following day (March 22), he had already raised 100 million naira. He disclosed that he had asked other willing donors to wait until after the pilot phase of the initiative, the Arewa Business Support Fund. 

He revealed that beneficiaries would receive interest-free business loans, which, when repaid, would be used to support more businesses. Beneficiaries would also enjoy free mentorship and consultancy. 

Responding to concerns that fluency in English could be a barrier, the captain assured the public that local languages would feature prominently in the Fund’s activities, stressing that businesses domiciled in the North, regardless of ownership and owners’ language proficiency, would be considered. 

He mentioned names of other stakeholders, including the acting financial secretary of the Fund, Mohammed Jammal (aka White Nigerian), Khalil Nur Khalil (economic adviser to Katsina State Government), and Mohammed Bello El-Rufai (a member of the House of Representatives), among others.

During a discussion among the stakeholders on X, it was revealed that Saleem Abubakar Musa (simply called Saleem) had been like a personal assistant to Captain Jamil.

On March 27, Saleem (@AM_Saleeeem) tweeted the summary of the subsequent activities of the Fund as follows:

“Next Steps:

– The website will be launched to the public soon, featuring comprehensive details, business templates, and practical guides (how to, when to, and what to do).

– Formal registration of the Arewa Business Support Fund as a legal entity, including banking and all required documentation.

– Nomination of Board of Trustees.

– Rollout of the pilot phase.”

However, the Fund will consider only existing businesses in the pilot phase; business ideas alone would be rejected.

By Muhammad Umar Shehu

Nigeria’s economic crisis is often discussed in technical language. We talk about inflation rates, exchange rates, GDP growth, fiscal deficits, and monetary tightening. Experts debate policy direction, subsidy removal, and currency reforms. Yet beneath all these discussions lies a deeper truth that we are reluctant to confront: Nigeria’s economic crisis is, at its core, a moral crisis.

In Adam Smith and Islam, Waseem Naser reminds us that economics was never meant to be detached from ethics. Adam Smith, widely regarded as the father of modern economics, was first a moral philosopher. Before writing The Wealth of Nations, he wrote The Theory of Moral Sentiments, where he emphasised sympathy, justice, and moral restraint. Markets, in his view, could not function in isolation from moral responsibility.

Islamic economic thought shares this foundation. Trade is encouraged, wealth is permitted, and enterprise is respected. But all of these operate within firm moral boundaries. Justice is non-negotiable. Exploitation is forbidden. Wealth carries responsibility. Accountability is certain.

When we examine Nigeria’s current situation through this lens, the picture becomes clearer.

Inflation continues to erode the purchasing power of ordinary citizens. The naira struggles for stability. Youth unemployment remains alarmingly high. The cost of food and transportation has risen beyond the reach of many families. These are economic realities. But they are also symptoms of deeper institutional and moral weaknesses.

An economy cannot thrive where corruption undermines trust. Adam Smith insisted that justice is the main pillar that upholds society. Once justice collapses, society itself begins to crack. In Nigeria, public funds are routinely mismanaged, contracts are inflated, and accountability mechanisms are weak. This is not merely inefficiency. It is moral decay.

Islamic principles reinforce this argument. Leadership is considered a trust. Public office is an amanah, not a private investment opportunity. When leadership becomes a means of personal enrichment, the moral foundation of governance collapses. What follows is predictable: inequality widens, poverty deepens, and citizens lose faith in the system.

The recent economic reforms, including the removal of fuel subsidies and exchange rate adjustments, may have theoretical justification. Many economists argue they were long overdue. However, reform without structured social protection reflects a failure of moral sensitivity. When policies disproportionately burden the poor while elites remain insulated, justice is compromised.

Adam Smith did not promote greed. He believed self-interest operates within moral boundaries shaped by social conscience. Islam teaches a similar balance. Wealth creation is legitimate, but not at the expense of human dignity. In Nigeria, however, profit often overrides public welfare.

Consider the widening gap between political elites and ordinary citizens. Luxury convoys move through streets where citizens struggle to afford basic commodities. Public spending priorities often appear disconnected from public suffering. This visible inequality damages more than economic stability. It damages national unity.

Islamic economic thought provides mechanisms for social balance, such as zakat and structured redistribution. These are not acts of charity alone. They are instruments of justice. In Nigeria, social intervention programs frequently suffer from poor targeting, lack of transparency, and political manipulation. The result is minimal impact and widespread distrust.

Nigeria does not lack natural resources. It does not lack human capital. What it lacks is consistent ethical leadership and institutional discipline. An economy built on fragile moral foundations cannot stand firm.

The lesson from both Adam Smith’s moral philosophy and Islamic economic principles is straightforward. Markets require trust. Trust requires justice. Justice requires accountability. Without these elements, reforms remain cosmetic.

If Nigeria is to move forward, economic reconstruction must be accompanied by moral reconstruction. Transparency must replace opacity. Accountability must replace impunity. Public service must replace personal gain.

Economic indicators may improve temporarily, but without ethical grounding, instability will return. Sustainable growth demands more than sound monetary policy. It demands character in leadership and integrity in institutions.

Nigeria’s future will not be secured by technical adjustments alone. It will be secured when justice becomes the true foundation of governance.

Until then, our economic crisis will remain what it has always been: a reflection of a deeper moral failure.

Muhammad Umar Shehu wrote from Gombe. He can be reached via: umarmuhammadshehu2@gmail.com.

By Nasiru Ibrahim 

Limited information in the market leads to inefficiency and misallocation of resources. A low-quality product or service can command a higher price, while high-skilled labour may receive lower wages. A seller with a high-quality product or service may incur losses because buyers cannot easily verify quality and are unwilling to pay a premium, fearing they may be overpaying for a low-quality alternative.

For example, a faulty car may sell at a high price because buyers lack technical knowledge, rely on appearances, brand reputation, or sellers’ claims, and face high inspection costs. A firm that chooses to be honest may lose by earning a lower profit margin because dishonest competitors exaggerate quality, cut corners, or hide defects while charging similar prices.

A quack or less-skilled consultant with fewer credentials and a weak track record may secure contracts faster due to information gaps, strong social networks, aggressive self-marketing, and clients’ inability to assess true competence before hiring.

In many markets, buyers seek to identify quality products or services by looking for higher prices, good public relations, branding, and heavy advertising. Poor-quality products and inefficient firms can imitate these signals, so both high- and low-quality products are often sold at roughly the same price. Under rational expectations, sellers understand that buyers believe higher prices signal higher quality. Buyers, lacking better information, rely on price as a shortcut, and low-quality sellers exploit this belief, leading to market failure similar to Akerlof’s Market for Lemons.

Demand for Experts, Agents, and Intermediaries

Information asymmetry increases the demand for experts, agents, consultants, brokers, and intermediaries who can distinguish good quality from bad. These agents help consumers get better deals and higher-quality products or services.

While this creates jobs, it does not necessarily solve consumer exploitation. Agents may collude with sellers, prioritise commissions over client welfare, exploit client ignorance, or add extra layers of cost without improving quality.

For example, if tax policy were simple and clearly understood, few people would need tax consultants. Complex systems create jobs for consultants and financial literacy experts. While this raises incomes and GDP, it can also raise prices because the cost of intermediaries is embedded in goods and services, contributing to inflation.

Efficiency vs Employment Trade-Off

Reducing information asymmetry improves efficiency but can increase unemployment in the short run. Many jobs—brokers, consultants, agents, and middlemen—exist mainly because consumers lack information. When governments improve transparency through clear regulations, digital platforms, and public data, fewer intermediaries are needed. As a result, demand for these expert roles declines, leading to job losses.

This creates a policy trade-off: greater transparency improves efficiency but reduces employment in information-based intermediary jobs. To manage this, governments should invest in retraining and help displaced workers move into sectors where skills add real value rather than exploiting information gaps.

Moral Hazard—Buyers Can Also Cheat

Moral hazard occurs after a transaction, when one party changes behaviour because costs are partly borne by the other party. Buyers are not always passive; they may also cheat when incentives allow.

Examples include tenants damaging rented property because repair costs are borne by landlords, insured individuals exaggerating losses, clients hiding information or misusing professional advice, and borrowers diverting loans to unintended uses.

Buyer-side moral hazard worsens inefficiency. Sellers respond by raising prices, tightening contracts, reducing quality, or exiting the market. Honest buyers then face higher costs and fewer choices, while resources are allocated to monitoring and enforcement rather than to productive activity. Information asymmetry is therefore two-sided, and policies must address both adverse selection and moral hazard through better contracts, monitoring, and enforcement.

Guarantees, Warranties, and Mixed-Quality Equilibrium

Guarantees and warranties are often introduced to signal product quality. High-quality sellers are willing to offer guarantees because defects are less likely, which should push low-quality products out of the market.

However, guarantees also create buyer-side moral hazard. Buyers may reduce care, overuse, or deliberately damage products because repairs or replacements are covered. This increases warranty costs for all producers.

High-quality firms may respond by raising prices, limiting coverage, or reducing quality investment. Low-quality firms can mimic guarantees by pricing in expected abuse. As a result, good and bad products coexist in equilibrium, despite the presence of guarantees. Guarantees improve trust but do not fully resolve market failure. Moral hazard shifts costs rather than eliminating inefficiency.

Digital Platforms, Formalization, and Consumer Protection

E-commerce and digital marketing platforms reduce information asymmetry by increasing price transparency, reviews, ratings, comparisons, and direct access to sellers. These tools reduce reliance on intermediaries and help consumers verify quality.

In cities like Abuja, Port Harcourt, and Lagos, consumers can reduce exploitation by:

Asking for the previous selling price and comparing across sellers.

Signaling willingness to switch if the price is unfair.

Checking online prices, reviews, or multiple shops to reduce information asymmetry!

Government can also reduce information asymmetry by formalizing markets, which improves record-keeping, transparency, standardization, and contract enforcement. Clear, fair, and incentive-based tax systems encourage voluntary compliance, provide access to credit, legal protection, and government contracts.

The government may invest ₦100 million in upgrading informal markets in Kano, Lagos, and Port Harcourt and taxing ₦20 million annually per market allows the government to recover costs within five years while boosting GDP and creating jobs.

Without incentives, multiple overlapping taxes increase compliance costs and deepen informality. Corruption, waste, and misuse of funds reduce citizen trust. Transparent, fair, and accountable government policies promote efficiency, formalisation, and market growth, while distrust, overconfidence, and policy failures harm the economy.

Ibrahim is a graduate of Economics from Bayero University, Kano and can be reached via nasirfirji4@gmail.com.

The Monetary Policy Committee of the Central Bank of Nigeria has lowered the benchmark interest rate to 26.5 per cent.

The decision marks the second rate cut under the current leadership of the apex bank.

Governor Olayemi Cardoso announced the outcome on Tuesday after the committee’s 304th meeting held in Abuja.

Cardoso said, “The Committee decided to reduce the monetary policy rate by 50 basis points to 26.5%.”

He also stated that the MPC resolved to “retain the Standing Facilities Corridor around the MPR at +50/-450 basis points” and to “retain the Cash Reserve Requirement for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and 75.00 per cent for non-TSA public sector deposits.”

The latest adjustment follows a similar 50-basis-point reduction in September 2025, while the committee maintained rates at its November 2025 meeting.

According to the governor, the move was based on “a balanced evaluation of risks to the outlook,” which indicates that “the ongoing disinflation trajectory would continue, largely supported by the lagged transmission of previous monetary tightening, sustained exchange rate stability, and enhanced food supply.”

He explained that headline inflation declined slightly to 15.10 per cent in January 2026 from 15.15 per cent recorded in December 2025. This represents the eleventh straight month of year-on-year decline.

Cardoso added that “Food inflation declined markedly to 8.89 per cent from 10.84 per cent,” while “core inflation declined to 17.72 per cent from 18.63 per cent.”

On a month-to-month basis, inflation dropped to -2.88 per cent in January from 0.54 per cent in December. The committee said this reflects “a continued softening of price pressures.”

The governor also highlighted progress in the external sector. He said the country’s gross external reserves increased to $50.45 billion as of February 16, 2026. He described it as “the highest in 13 years,” with an import cover of 9.68 months for goods and services.

He attributed the growth in reserves to stronger export earnings and higher remittance inflows. He said these factors have supported exchange rate stability and boosted investor confidence.

Cardoso further noted the introduction of Presidential Executive Order 09, which channels oil and gas revenues into the Federation Account. The committee “welcomed” the order and “acknowledged the potential impact of this Order in improving fiscal revenue and accretion to reserves.”

On the banking sector, the governor said key financial indicators remain within regulatory limits. He disclosed that 20 out of 33 banks involved in the recapitalisation programme have met the new minimum capital requirement. The committee described this as “steady progress towards a more robust and well-capitalised financial system.”

The MPC reiterated “the strategic importance of the recapitalisation exercise” and urged the bank to ensure its successful completion to strengthen resilience and support growth.

On economic performance, the Purchasing Managers’ Index stood at 55.7 points in January 2026. This suggests continued expansion in economic activity and possible improvement in output for the last quarter of 2025.

Looking ahead, Cardoso said the outlook shows that “the current momentum of domestic disinflation will continue in the near term,” supported by exchange rate stability and better food supply.

He, however, warned that “increased fiscal releases, including election-related spending, could pose upside risk to the outlook.”

The governor reaffirmed the MPC’s commitment to “an evidence-based policy framework, firmly anchored on the Bank’s core mandate of ensuring price stability, while safeguarding the soundness and resilience of the financial system.”

He added that the next MPC meeting is scheduled for May 19 and 20, 2026.

By Ahmed Usman

The global economic order is no longer merely under strain; it is fragmenting in ways that are particularly costly for countries like Nigeria and much of the Global South. Across continents, economic anxiety is feeding political instability, geopolitics is reshaping markets, and institutions once designed to stabilise the world are struggling to remain relevant. What we are witnessing is not a temporary downturn or a cyclical adjustment, but a deeper structural breakdown, driven by forces once assumed to guarantee global stability. For many emerging and developing economies, this moment is not just about global disorder; it is about survival within it.

Global economic power is shifting rapidly. Liberal market-oriented democracies are facing unprecedented domestic turmoil, and the deep integration of trade and finance that defined recent decades is steadily unravelling. From supply-chain fragmentation to trade wars, sanctions, and tariff escalation, the global economy is retreating from openness toward fragmentation. The question is no longer whether the post–World War II economic order is weakening, but how it reached this point and what, if anything, can replace it.

Ironically, the very country long believed to anchor global stability is now fueling its destabilisation. Globalisation was supposed to spread prosperity, deepen interdependence, and reduce the likelihood of conflict. Instead, it has widened inequality within countries, eroded the middle class in developing economies, and concentrated gains among a narrow elite. These imbalances have stoked political backlash, empowered populist movements in developed economies, and turned trade into a political weapon rather than a shared economic good.

This shift became unmistakable during the Trump administration, when tariffs, once viewed as relics of a protectionist past, returned to the centre of global economic policy. The imposition of broad tariffs on China and other trading partners signalled a decisive break from the rules-based trade order. What began as “America First” protectionism quickly reshaped global behaviour, legitimising unilateral trade actions, encouraging retaliation, and accelerating the erosion of multilateral discipline. Trade policy, once anchored in cooperation, became openly confrontational, and the precedent has proven difficult to reverse.

Nowhere is this erosion more evident than in the weakening of trust in liberal democracies themselves. Economic dislocation has bred social resentment. In developing countries, repeated external shocks such as oil price shocks, global interest rate hikes, and pandemic disruptions have led to inflation, currency depreciation, and shrinking real incomes. Rising living costs, youth unemployment, and fiscal austerity have weakened trust in democratic institutions and fueled social unrest.

Domestic politics, in turn, have become more constrained, limiting the policy space needed to pursue long-term development strategies. Political polarisation has weakened governments’ ability to sustain coherent economic policies. As domestic politics grows more volatile, foreign economic policy becomes reactive and confrontational. Trade barriers rise, industrial policy replaces market openness, and economic nationalism becomes a political necessity rather than an exception in many Western countries.

At the same time, the global institutions meant to manage these tensions have failed to evolve. The International Monetary Fund, the World Bank, and the World Trade Organisation, the cornerstones of the post–World War II economic architecture, were designed for a world dominated by a small group of advanced economies. Today, they struggle to respond to capital-flow volatility, technological disruption, climate risk, and the growing power of emerging markets. Their rules remain largely intact, but their legitimacy and effectiveness are increasingly questioned. Their frameworks are still anchored in assumptions that often underestimate social costs in developing countries. Conditionality, delayed financing, and inadequate attention to inequality and structural transformation have weakened their credibility across the Global South. The World Trade Organisation, meanwhile, has struggled to prevent powerful economies from bending trade rules in their favour through subsidies, tariffs, and industrial policy practices that have become more entrenched since the normalisation of tariff-based trade conflict under Trump.

For a time, the rise of emerging markets such as India, Brazil, Nigeria, and Turkey seemed to promise a more balanced and stable multipolar world. These nations benefited from globalisation without fully aligning with any single power bloc, acting as bridges between North and South, East and West. But today, that space is narrowing. Intensifying rivalry between the United States and China has turned trade, technology, finance, development assistance, and even currency choices into tools of geopolitical competition, forcing emerging market economies to pick sides in a contest they did not create.

For countries like Nigeria, this strategic squeeze is especially critical. Dependence on imported technology, foreign capital, and external energy markets makes neutrality costly. Sanctions regimes, supply-chain fragmentation, tariff escalation, and financial market volatility now transmit geopolitical tensions directly into domestic inflation, exchange rates, and public finances. What appears as global disorder at the international level is experienced as household hardship at home.

What emerges from this landscape is a destructive feedback loop between economics, domestic politics, and geopolitics. Economic shocks fuel political instability; political instability drives inward-looking policies; those policies heighten geopolitical tensions; and geopolitical tensions, in turn, further destabilise the global economy. Each turn of the loop reinforces the next, making disorder self-perpetuating.

This is why familiar prescriptions no longer suffice. Calls for more trade liberalisation, fiscal discipline, or institutional reform are not wrong, but are no longer enough. The world has changed too profoundly. Technology is reshaping labour markets faster than institutions can respond. Climate change is imposing costs that markets alone cannot price. Capital moves instantly, while political accountability remains national. Old solutions were built for a slower, more predictable world.

Breaking out of this cycle requires abandoning the comforting illusion that existing global arrangements will eventually self-correct. Calls for more liberalisation, deeper financial integration, or stricter fiscal discipline ignore the lived realities of developing economies. The old playbook was written for a world of expanding trade, cheap capital, and geopolitical cooperation. That world no longer exists.

What is needed instead is a fundamentally new approach. For Nigeria and the Global South, this means redefining integration on terms that prioritise resilience over efficiency. It means reforming global financial institutions to provide faster, more flexible support during shocks. It means investing in domestic productive capacity, regional trade, and human capital rather than relying on volatile external demand. And it means recognising that economic policy must be politically sustainable to endure.

The global economy is spiralling into disorder, not because globalisation failed entirely, but because it evolved without fairness, adaptability, or legitimacy. For countries like Nigeria, the stakes could not be higher. Remaining trapped in the doom loop will deepen vulnerability. Escaping it demands new thinking, new institutions, and a development model rooted in resilience rather than dependency.

The future of the Global South will not be secured by waiting for the old order to return. It will be shaped by how boldly countries confront the reality that the old solutions can no longer solve today’s problems.

The world is not spiralling into disorder by accident. It is doing so because the systems governing it have failed to adapt. Recognising this is the first step. The harder task of building a new framework for global cooperation in an age of rivalry, inequality, and uncertainty is now unavoidable.

The choice ahead is unambiguous: continue circling the doom loop, or accept that the old economic order cannot save us and begin the difficult work of inventing something new.

By Isah Kamisu Madachi

The furore over whether the tax laws should be implemented has passed. The nationwide discussions about the discrepancy between the gazetted version and the version passed by the National Assembly have also faded. January 1 has come and gone, and many changes, especially around digital transactions, are already beginning to manifest, as provided for under the new tax law. The consolidated tax laws under the tax reform regime are now in force, and as a citizen, I hope they are backed by strong accountability mechanisms and oversight to ensure that collected taxes are used for the right purposes.

However, I observed a major policy gap in the final moments of the law’s implementation, which, if left unaddressed, could not only undermine the law’s effectiveness but also cause greater harm to its objectives. If I were to estimate, I would say that less than 5% of Nigerians understand what the new tax law contains, how it works, and what it does not do. This knowledge gap has created a fertile ground for misinformation, disinformation, and fake news. 

In the past few days, I have personally encountered many people who told me they had withdrawn all the money saved in their bank accounts and converted it to cash. They said they no longer trust cashless transactions. Some were told that every transaction, regardless of the amount, would incur a flat ₦50 fee. 

Others were also told that keeping money in their accounts would result in monthly deductions, or that 5% of their savings would be deducted each month for tax. None of these claims could be traced to any provision of the law, yet they are widely shared with absolute confidence.

Another unfortunate experience was my encounter with a young and vibrant POS agent from whom I regularly withdraw cash. He told me he had shut down his business. According to what he was told, every ₦500,000 transaction would attract ₦15,000 in tax, every ₦5 million would attract ₦250,000, and any transaction above ₦1,000 would automatically be charged ₦50. 

He was also told these deductions would be accumulated and collected at the end of the month, and that’s what frightened him most. He used to make transactions averaging ₦50 million per month. With this information, he now chose to abandon his livelihood. Whether these claims are true or false is not the most important when one considers the damage such misinformation is already causing.

There is also a growing narrative, particularly on social media, that every transaction must now be clearly explained in the narration section. People are being told they must specify whether the money is for savings, shopping, gifts, rewards, profit, or salary. A counter-narrative exists saying this is false. Sadly, the average Nigerian does not know which version to believe. In an environment where official clarity is weak, rumours travel faster than facts.

If I were to document all the misinformation circulating about the new tax law, it would take more than a newspaper opinion. New versions emerge almost every hour. The most alarming outcome of this misinformation is how people are altering their economic behaviour. Businesses are being abandoned. Trust in digital finance is being eroded. People are deserting the cashless system out of fear, believing their money is no longer safe in the banking system.

The only effort I am aware of to address this information gap is the reported engagement of social media influencers to enlighten the public. If this effort has begun, it is not enough. If it has not, then it is urgently needed. But beyond influencers, one must ask: what happened to local radio stations? Radio remains the primary source of information for millions of Nigerians, especially in rural areas. The law should be broken down and discussed in local languages on local radio. 

There are also a proliferation of online television platforms operating across social media spaces. The tax reform committee should collaborate strategically with them to explain the law in simple, creative ways. Influencers alone cannot carry this burden. Public communication must be broader, more structured, and more deliberate.

The Federal Ministry of Information also plays a central role here. There is an urgent need for a simplified version of the tax law, as well as translations into local languages, and for their dissemination in collaboration with state ministries of information. Students, heads of households, community leaders, traders, and small business owners must all be deliberately engaged. Town hall meetings, especially in peri-urban communities, should be organised. They are necessary to counter the scale of misinformation already circulating.

When people are largely unaware of what a law entails, dysfunction is inevitable. The law may exist, but its implementation will be undermined by fear, resistance, and unintended consequences. By the look of things, those who understand the new tax law are currently the fewest in Nigeria, even among the highly educated. If this gap remains wide open, the law may struggle to achieve its intended outcomes.

Now that it’s here, I hope, and I genuinely pray, that if effectively implemented and properly communicated, the new tax laws will become one of the long-awaited channels for fixing many of Nigeria’s challenges. But without deliberate public education, I doubt if the policy can yield the desired result.

Isah Kamisu Madachi is a public policy enthusiast and development practitioner. He writes from Abuja and can be reached via: isahkamisumadachi@gmail.com.