Oye’s Exposé on Nigeria’s Economic Underbelly

Crusoe Osagie explains the concerns raised by Dele Oye on the risks that currently place the Nigerian economy on the verge of the precipice

Perhaps, apart from the few who serve in government at the highest levels, there is hardly any Nigerian who is not feeling the strain of the country’s current economic situation.
With the middle class virtually wiped out, and many from the former upper class slipping downward, the most common form of innovation in Nigeria today is that which simply ensures daily survival—putting food on the table and clothes on people’s backs.
To be fair, the current administration inherited a nation already in poor economic condition from its predecessor. However, with President Bola Ahmed Tinubu recently stating publicly that he “took over from himself,” it becomes difficult to shift blame elsewhere. Responsibility, therefore, rests squarely on the shoulders of his government.

What Nigeria appears to have now is a K-shaped economy—one where a small fraction of the population continues to rise, while the vast majority sinks further into economic hardship.
Although many analysts who once guided public understanding during challenging times have grown silent, one private sector voice has remained consistent. That voice belongs to Mr. Dele Oye, Chairman of the Alliance for Economic Research and Ethics Limited/GTE.
Speaking at a forum organised by Vanguard Newspapers last week, Oye made a striking assertion: while Nigeria may be recording growth in its published Gross Domestic Product (GDP), that growth excludes nearly 200 million Nigerians.

Growth Without Prosperity

Nigeria’s recent macro-economic story is one of uneasy contradiction. Stabilisation has been achieved—at least on paper—but at a cost borne overwhelmingly by households. The country has moved away from a fiscal cliff: debt servicing, once consuming virtually all government revenue, has eased from catastrophic levels; foreign reserves have recovered; capital inflows have rebounded. Yet these gains, while notable, are not synonymous with broad-based prosperity. They are, instead, the narrow foundations of a recovery that risks entrenching inequality.

What has become increasingly difficult to ignore, however, is where the proceeds of reform appear to have gone. The removal of fuel subsidies and the devaluation of the currency were sold as painful but necessary corrections—measures that would free fiscal space for investment and restore economic balance. Instead, to many Nigerians, they look like a transfer: from the pockets of the many to the privileges of the few. A political class already insulated from market discipline appears, if anything, more opulent in the age of austerity.

The paradox is stark. Output is rising, but poverty is rising faster. More than six in ten Nigerians now live below the poverty line, a figure that has climbed steadily despite headline GDP growth. This is not an anomaly; it is the logical outcome of an economic structure that concentrates gains in capital-intensive sectors while leaving labour-intensive ones to languish. Finance, telecommunications and services expand. Agriculture and manufacturing—employers of the majority—remain starved of credit, infrastructure and policy coherence.

Yet even this diagnosis understates the political economy at work. At a moment when households have been forced into abrupt and painful adjustment, the state has shown little inclination to do the same. Nigeria’s legislature remains among the most expensive in the world, its members beneficiaries of allowances and perks that would be eye-watering in far richer countries. The symbolism is hard to miss: austerity for citizens, abundance for officials.

The executive, too, has done little to temper this perception. The convoys remain long, the vehicles increasingly armoured and exotic—rolling fortresses that signal distance rather than service. Federal and state cabinets alike continue to equate authority with excess, even as inflation erodes the purchasing power of those they govern. Meanwhile, the presidential air fleet—recently expanded—has become a fixture of international travel, deployed with a frequency that sits uneasily alongside calls for domestic sacrifice.

Distorted financial system

At the heart of the problem lies a distorted financial system. Banks, faced with high interest rates and generous sovereign yields, have chosen the path of least resistance. Rather than financing farms or factories, they have poured trillions of naira into government securities. The returns are high, the risks negligible. The consequences, however, are severe: a private sector deprived of capital, a real economy suffocated, and a state that crowds out the very growth it seeks to promote.

This is not merely inefficiency; it is a form of institutionalised rent-seeking—one that extends beyond finance into governance itself. When public office becomes the most lucrative economic activity, incentives shift decisively away from production and toward proximity to power. The result is a system in which reform generates revenue, but politics determines its distribution.

Compounding this failure is the government’s enduring temptation to act as entrepreneur. Nigeria’s economic history is littered with the costly remnants of this ambition: billions sunk into steel plants that never produced, refineries that never refined, airlines that never flew competitively, and telecommunications monopolies that collapsed under their own inefficiency. These are not isolated missteps. They are systemic failures rooted in a misunderstanding of the state’s role in a modern economy.

The lesson is well established, yet persistently ignored. Governments are poor operators of commercial enterprise. Their comparative advantage lies in regulation, coordination and the provision of public goods. Where they attempt to substitute for markets, they destroy value; where they enable markets, they can unleash it.

Nigeria’s economic dilemma

Nowhere is this more evident than in the livestock sector—a microcosm of Nigeria’s broader economic dilemma. The country possesses one of the largest cattle populations in Africa and a vast domestic market. Yet it imports dairy products worth billions of dollars annually and remains dependent on foreign meat supplies. The constraint is not resource scarcity but institutional failure.

Public investment in the sector has been derisory relative to its potential. Budget allocations amount to a fraction of the industry’s economic value, rendering grand strategies little more than aspirational documents. Meanwhile, the underlying model remains flawed: too much emphasis on state-led execution, too little on private-sector dynamism.

International experience offers a clear alternative. Successful agricultural exporters have adopted a consistent formula: the state sets standards, builds infrastructure and opens markets; private actors invest, produce and compete. This division of labour is not ideological—it is practical. It aligns incentives, allocates risk efficiently and ensures accountability.

For Nigeria, the implications are immediate. Structural transformation will not come from macro-economic adjustment alone. It requires a reorientation of the entire economic architecture: away from rent extraction—both financial and political—and towards value creation; away from state excess and towards institutional discipline; away from financial speculation and towards productive investment.

That means not only forcing a rebalancing of credit toward the real economy, but also demanding fiscal restraint from the political class itself. Reform cannot be credible if it is asymmetrical. A government that asks its citizens to endure hardship must demonstrate, visibly and materially, that it is willing to share in that burden.

The stakes are high. Without such changes, Nigeria risks entrenching a dual economy: one that delivers growth—and privilege—for a few, and austerity for the many. With them, it could convert its considerable assets—land, labour and entrepreneurial energy—into inclusive prosperity.

For now, the verdict is clear. Nigeria has stabilised, but it has not transformed. And until both its economics and its politics are reformed in tandem, growth will remain not just a statistic—but a deeply contested one.