The Group Chief Economist and Managing Director at the African Export-Import Bank (Afreximbank), Dr. Yemi Kale, has called for a fundamental shift in Nigeria’s approach to economic management, urging the government to adopt anticipatory governance to tackle persistent macroeconomic instability and worsening hardship.
Speaking at the Vanguard Economic Discourse, held at the Civic Centre in Victoria Island, Lagos, Dr. Kale delivered the keynote address titled “Nigeria’s Economic Outlook 2025 – Hardship and Pathways to Sustainable Recovery.”
He emphasized that Nigeria’s economic challenges are largely self-inflicted—arising not from unexpected external shocks, but from poorly designed domestic policies lacking appropriate safeguards.
“We often respond, not with foresight, but with reaction,” Kale said. “Interventions are frequently triggered only after economic distress erupts into some form of social risk—at which point emergency measures are deployed hastily and unevenly, rather than pre-emptively shielding citizens from foreseeable disruptions.”
Proactive Policy Over Reactionary Measures
Dr. Kale stressed the need for a strategic pivot towards anticipatory governance—a framework where government policies are proactive, data-driven, and designed to mitigate risks before they escalate. Central to this approach, he said, should be the strengthening of social safety nets, public trust in institutions, and protection of vulnerable populations.
“In many cases, the disruption is not an unanticipated external shock beyond the government’s control,” he noted. “Often, the hardship stems from policies introduced by the state itself. These are not unforeseen events—they are planned decisions.”
He criticized the absence or deprioritization of policy safeguards, even when the socio-economic consequences of certain decisions are well known. In Nigeria’s high-inflation environment, he observed, citizens have adopted a risk-averse stance, delaying financial decisions and gravitating toward public sector jobs in search of income security.
Cycle of Stagnation and Decline
This climate of distrust and uncertainty, Kale warned, is driving a broader cycle of economic stagnation—marked by reduced consumer demand, sluggish GDP growth, declining private investment, rising unemployment, and deepening poverty.
“Businesses, too, adapt defensively in environments characterised by high uncertainty and macroeconomic turbulence,” he said. “Firms adopt risk-averse hiring plans and defer investments. Budgets are slashed, and aspirations give way to mere survival. The focus shifts from building to coping, from innovation to cost containment.”
Revenue Instability and Short-Term Populism
Dr. Kale also highlighted the growing difficulty in government revenue forecasting, citing unstable commodity prices, volatile exchange rates, and inconsistent tax performance. These factors, he said, are pushing policymakers toward short-term, populist interventions—such as expanding public sector employment, increasing cash transfers, or in constrained scenarios, resorting to monetary financing.
“While such measures may provide temporary relief or political capital, they sustain fiscal deficits, undermine macroeconomic stability, and erode the credibility of public institutions,” he warned.
The Road Ahead
Dr. Kale concluded by calling for systemic reform, urging policymakers to shift from reactive governance to a long-term, sustainable vision that prioritizes economic resilience, institutional integrity, and public confidence.
