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Analysis

A tale of two reforms – why Nigeria must not blink

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4 months ago

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By O’tega Ogra

Economic reform is never painless. Every nation that has had to correct profound distortions has faced the same choice: take the hard medicine early, or delay and pay much more later. In times of public frustration, it is tempting to reach for the “gentle” option (the idea of gradual change), being pushed by some opposition elements in Nigeria, begins to sound reasonable. Peter Obi says, “Keep subsidies for a while.” For Atiku Abubakar, it is “Guide the currency quietly from behind the curtain.” Rotimi Amaechi and Nasir El-Rufai want to “Push the tough structural work into another year.” On the surface, it feels safer. But history is clear on where that road leads. When Bulgaria began its transition from communism in 1990, its leaders were afraid of the shock that rapid liberalisation might cause. They freed some prices but kept politically sensitive subsidies in place, just as Peter Obi proposes. The subsidies drained the treasury, fuelled inflation, and collapsed the currency. They maintained a soft peg for the lev without reserves to defend it, exactly as Atiku Abubakar suggests for the naira. The peg broke, reserves vanished, and hyperinflation soared above 2,000 percent. They warned against “too much at once,” echoing Rotimi Amaechi and Nasir El-Rufai, and delayed the restructuring of state enterprises. Six years later, pensions were worthless, shops were empty, and the reforms they feared were forced on them in far harsher form.
Nigeria today is on a very different trajectory. From his first day in office, President Bola Ahmed Tinubu took on the biggest distortions head-on. The petrol subsidy, which drained over four trillion naira a year, is gone. The naira now trades at a market-driven rate, closing the damaging gap between official and parallel exchange rates. The Central Bank has returned to orthodox monetary policy, raised interest rates to fight inflation, and cleared more than seven billion dollars in verified FX backlogs that had become a national credibility problem. That clearance restored credibility to our financial system and prompted the International Air Transport Association to remove Nigeria from its list of countries blocking airline funds. That reversal matters because it signals to every global balance sheet that Nigeria pays its obligations again. These decisions have delivered measurable wins in record time. The World Bank estimates subsidy savings of around two trillion naira in 2023 alone, with cumulative savings expected to exceed eleven trillion naira by 2025. This money is already being channelled into infrastructure, healthcare, and targeted social programmes across the country. Portfolio inflows in the last quarter of 2024 hit 5.6 billion dollars, more than the total of the previous two years combined and a clear sign that rule clarity is drawing money back to local assets. Non-oil tax revenue has grown by more than twenty percent year-on-year.
Price pressure remains the public’s sharpest pain, but the first signs of relief are appearing. Official data show headline inflation eased in June 2025 from May, the first back‑to‑back moderation in many months. Disinflation never arrives in a straight line. What matters is direction and credibility of policy. Both are moving the right way. Yet this is the stage when voices, mostly driven by parochial interest, will call for a pause. Some will say households need breathing space and subsidies should return in another form. Others will argue that the naira is too weak and should be fixed at a stronger rate. There will be calls to slow fiscal clean-up until “conditions improve.” The bandwagon Association of Displaced Politicians, and the economists they front, want us to go back to Bulgaria 1990. Atiku Abubakar’s “acceptable rate” is the same illusion that emptied Bulgaria’s reserves and shattered its peg. Peter Obi’s “phased removal” is the same phased lie Bulgaria told itself until the economy collapsed. Nasir El-Rufai’s warning about “too much at once” is exactly what Bulgaria’s leaders said before the crash. Rauf Aregbesola’s “prioritise the people before the economy” mirrors Bulgaria’s fatal separation of the two, where the collapse of the economy destroyed the very livelihoods they claimed to protect – as if the economy is not the lifeline of the people. Rotimi Amaechi’s call to slow down is the same thinking that turned hardship into collapse.
These are not alternative strategies. They are invitations to failure. They are the comfort-now, crisis-later prescriptions that have failed every country that tried them. And in every country where this happened, the politicians who sold them were gone by the time the bill arrived. The same politicians who had their turn in power and left Nigeria with a broken FX regime, ballooning subsidies, and a dangerous debt overhang now want to lecture about “protecting the people” by bringing back the very distortions that were killing growth. That is not protection. That is sabotage dressed as sympathy. A soft peg without deep reserves burns credibility while draining scarce foreign exchange. Partial liberalisation keeps the price distortions that breed shortages and arbitrage. Delaying the clean-up of state owned enterprises only compounds losses and pushes the real costs into the future. Once you retreat from hard reforms, investor trust evaporates, deficits swell again, and the cost of borrowing climbs. The longer you wait, the fewer options remain when the next shock comes. And when that bill finally arrives, it is always larger than it would have been if settled early.
We have seen this film before. In 1990 Bulgaria called it gradual reform. By 1996, pensions were worthless, shops and shelves were empty, and the same politicians who promised a soft landing had fled the wreckage. The dire situation in. Bulgaria forced a desperate rescue the following year under conditions far harsher than anything they had wanted to avoid. I confidently repeat that, in Nigeria, those pushing this fantasy today will not be around to clean up the mess tomorrow. The only question is whether we have the discipline to finish the job or whether we hand the steering wheel back to the people who drove us into the ditch in the first place. Nigeria is not Bulgaria in 1990. We will not drift toward collapse because a few familiar names prefer popularity over responsibility. The alternative is to hold the line and let the compounding work in our favour. Clean our books and keep the auction rulebook predictable. Keep subsidy savings transparent and tied to visible projects so citizens can see where the money now goes. Keep monetary policy tight until inflation is back within a credible band and do not second‑guess the float with administrative fixes that markets will immediately punish. The IMF’s recent assessment underscored that Nigeria’s policy direction restores repayment capacity and anchors stability if pursued consistently. That is the quiet endorsement that disciplined reformers earn.
Because this debate will not end here, it is worth meeting the counter‑arguments head on. Some say the pain on households is too high and too fast. The truth is the subsidy was never free. It was paid through bad roads, weak schools, failing hospitals and heavy borrowing that our children would service. Redirected savings are how you rebuild those services. Others say the float has made the naira too weak and that we should fix it at a stronger number. A number without reserves is only a promise. Markets test promises. Bulgaria failed that test in 1990 and paid for it in 1996. Nigeria should not repeat it. Another claim is that investors are not yet flooding in, so reforms are not working. They rarely flood in at the start. They watch for consistency, then move quickly. The late‑2024 surge in portfolio inflows is exactly that early signal. Hold the line and the longer term money follows. But as Mr President has always said and I am fully aware, Nigeria’s path is not without discomfort, but it is the only one that gives us a fighting chance to rebuild. The facts of upward, positive change are not in dispute. It is already producing the first signs of stability and renewed investor interest. The trajectory, if we hold it, leads to a competitive and credible naira, a fiscally stronger state investing in power, roads, and schools instead of fuelling petrol imports, and an economy where capital flows in because the rules are predictable and the numbers add up. Growth will no longer be hostage to oil prices alone, and the non-oil revenue gains of the current and past year are the proof.
The opposition has shown that they have chosen collapse. Some former allies have joined them. The rest of us must hold the line. History has already written the ending for the road they want. We have chosen a different ending. There is no painless exit from decades of distortion. The choice is as stark as it is simple. Pain now with a recovery you can see, or comfort now with a collapse you cannot control. Bulgaria 1990 is the warning. Nigeria 2023 is the opportunity. We are already making in months the progress that took years for countries in similar positions. If we keep our nerve, stay transparent, and refuse the detours that have failed elsewhere, we will not just avoid Bulgaria’s trap. We will write the modern African recovery story others will study. And this is the truth we must hold to. The easy road has never led any nation to greatness. What we are doing under President Bola Ahmed Tinubu is hard, but it is necessary. We will be judged not by how loud the complaints were in the first year, but by the strength of our economy in the fifth and thereafter. If we see this through, the same Nigerians who today feel the sting will one day stand as proof that under President Bola Ahmed Tinubu, Nigeria chose courage over comfort, and that choice changed the destiny of our nation for good and forever. And if we have the discipline to finish this path, it will be the one in which Nigeria wins.
The Tiger’s Final Take: The Koko of the Matter
Bulgaria’s 1990 reforms teach us that gradualism in the face of structural crisis is not kindness. it is negligence in slow motion. Nigeria’s current path under President Tinubu is the opposite. It is tough, urgent, and forward-looking. If we hold this line, the discomfort will give way to resilience, competitiveness, and prosperity. Nigeria’s reforms today are closer to Bulgaria’s 1997 reset which is the one that finally worked, rather than to its failed 1990s drift. The difference is that Nigeria is doing it before hitting hyperinflation or a currency collapse. It is the hard road, but it is the right road, and it leads upward. This is the best time to Bet on Nigeria.

*Ogra is the Senior Special Assistant to President Bola Tinubu of Nigeria on Digital Communications, Engagement, and Strategy.

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Analysis

As EU plans Russian Gas exit, Ministers to convene in Paris to chart Africa’s export potential

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2 weeks ago

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November 19, 2025

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In the wake of seismic shifts in the European energy landscape, the Invest in African Energy (IAE) 2026 Forum in Paris will host a Ministerial Dialogue on “Unlocking Africa’s Gas Supply for Global Energy Security.” This strategic session will examine how Africa can turn its untapped gas reserves into a reliable and sustainable source of supply. With Europe seeking to diversify away from Russian gas, the dialogue highlights both the continent’s growing role in global energy markets and the opportunity for African producers to attract long-term investment. Recent developments underscore the urgency of Africa’s role in global energy security. Last month, EU countries agreed to phase out their remaining Russian gas imports, with existing contracts benefiting from a transition period: short-term contracts can continue until June 2026, while long-term contracts will run until January 2028. In parallel, the European Commission is pushing to end Russian LNG imports by January 2027 under a broader sanctions package aimed at limiting Moscow’s energy revenues.

Africa’s role in this rebalancing is already gaining momentum. Algeria recently renewed its gas supply agreement with ČEZ Group, ensuring continued deliveries to the Czech Republic. In Libya, the National Oil Corporation (NOC) has approved new compressors at the Bahr Essalam field to boost output and reinforce flows via the Greenstream pipeline to Italy. These developments complement the Structures A&E offshore project – led by Eni and the NOC – which is expected to bring two platforms online by 2026 and produce up to 750 million cubic feet per day, supporting both domestic and European demand. West Africa is pursuing ambitious export routes as well.

Nigeria, Algeria and Niger have revived the Trans-Saharan Gas Pipeline (TSGP), with engineering firm Penspen commissioned earlier this year to revalidate its feasibility. The proposed $25 billion Nigeria–Morocco pipeline is also advancing as a long-term corridor linking West African gas to European markets. Meanwhile, the Greater Tortue Ahmeyim (GTA) project off Mauritania and Senegal came online earlier this year, with its first phase targeting 2.3 million tons of LNG annually. In June, the project delivered its third cargo to Belgium’s Zeebrugge terminal, marking the first African LNG shipment from GTA to Europe. Together, these milestones underscore a strategic convergence: African producers are accelerating efforts to scale up exports just as Europe intensifies its search for reliable alternatives to Russian gas.

Yet, as the ministerial session will explore, unlocking Africa’s gas supply demands sustained investment, regulatory alignment, environmental management and community engagement. For Europe, diversification of supply is a strategic necessity; for African producers, it is an opportunity to accelerate development, build infrastructure and secure long-term capital. At IAE 2026, these shifts will be examined by the officials and stakeholders driving them. The Ministerial Dialogue brings African energy leaders together with European policymakers, industry players and investors in a setting that supports practical, solution-focused discussion on supply, export strategies and future cooperation. As Europe adapts its gas strategy and African producers progress major projects, the Forum provides a direct platform for ministers to outline priorities and for investors to engage with key decision-makers.

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Analysis

Authorities must respond as digital tools used by organized criminals accelerate financial crime—IMF

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3 weeks ago

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November 18, 2025

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International Monetary Fund IMF, has said that criminals are outpacing enforcement by adapting ever faster ways to carry out digital fraud. The INF in a Blog post said the Department of Justice in June announced the largest-ever US crypto seizure: $225 million from crypto scams known as pig butchering, in which organized criminals, often across borders, use advanced technology and social engineering such as romance or investment schemes to manipulate victims. This typically involves using AI-generated profiles, encrypted messaging, and obscured blockchain transactions to hide and move stolen funds. It was a big win. Federal agents collaborated across jurisdictions and used blockchain analysis and machine learning to track thousands of wallets used to scam more than 400 victims. Yet it was also a rare victory that underscored how authorities often must play catch-up in a fast-changing digital world. And the scammers are still out there. They pick the best tools for their schemes, from laundering money through crypto and AI-enabled impersonation to producing deepfake content, encrypted apps, and decentralized exchanges. Authorities confronting anonymous, borderless threats are held back by jurisdiction, process, and legacy systems.
Annual illicit crypto activity growth has averaged about 25 percent in recent years and may have surpassed $51 billion last year, according to Chainalysis, a New York–based blockchain analysis firm specializing in helping criminal investigators trace transactions. Bad actors still depend on cash and traditional finance, and money laundering specifically relies on banks, informal money changers, and cash couriers. But the old ways are being reinforced or supercharged by technologies to thwart detection and disruption.
Encrypted messaging apps help cartels coordinate cross-border transactions. Stablecoins and lightly regulated virtual asset platforms can hide bribes and embezzled funds. Cybercriminals use AI-generated identities and bots to deceive banks and evade outdated controls. Tracking proceeds generated by organized crime is nearly impossible for underresourced agencies. AI lowers barriers to entry. Fraudsters with voice-cloning and fake-document generators bypass the verification protocols many banks and regulators still use. Their innovation is growing as compliance systems lag. Governments recognize the threats, but responses are fragmented and uneven—including in regulation of crypto exchanges. And there are delays implementing the Financial Action Task Force’s (FATF’s) “travel rule” to better identify those sending and receiving money across borders, which most digital proceeds cross.
Meanwhile, international financial flows are increasingly complicated by instant transfers on decentralized platforms and anonymity-enhancing tools. Most payments still go through multiple intermediaries, often layering cross-border transactions through antiquated correspondent banks that obscure and delay transactions while raising costs. This helps criminals exploit oversight gaps, jurisdictional coordination, and technological capacity to operate across borders, often undetected.
Regulators and fintechs should be partners, and sustained multilateral engagement should foster fast, cheap, transparent, and traceable cross-border payments. There’s a parallel narrative. Criminals exploit innovation for secrecy and speed while companies and governments test coordination to reduce vulnerabilities and modernize cross-border infrastructure. At the same time, technological implications remain underexplored with respect to anti–money laundering and countering the financing of terrorism, or AML/CFT. Singapore’s and Thailand’s linked fast payment systems, for example, enable real-time retail transfers using mobile numbers; Indonesia and Malaysia have connected QR codes for cross-border payments. Such innovations offer efficiency and inclusion yet raise new issues regarding identity verification, transaction monitoring, and regulatory coordination.
In India, the Unified payments interface enables seamless transfers across apps and platforms, highlighting the power of interoperable design. More than 18 billion monthly transactions, many across competing platforms, show how openness and standardization drive scale and inclusion. Digital payments in India grew faster when interoperability improved, especially in fragmented markets where switching was costly, IMF research shows These regional innovations and global initiatives reflect a growing understanding that fighting crime and fostering inclusion are interlinked priorities—especially as criminals speed ahead. The FATF echoed this concern, urging countries to design AML/CFT controls that support inclusion and innovation. Moreover, an FATF June recommendation marks a major advance: Requiring originator and beneficiary information for cross-border wire transfers—including those involving virtual assets—will enhance traceability across the fast-evolving digital financial ecosystem.
Efforts like these are important examples of how technology enables criminal advantage, but technology must also be part of the regulatory response.
Modernizing cross-border payment systems and reducing unintended AML/CFT barriers increasingly means focusing on transparency, interoperability, and risk-based regulation. The IMF’s work on “safe payment corridors” supports this by helping countries build trusted, secure channels for legitimate financial flows without undermining new technology. A pilot with Samoa —where de-risking has disrupted remittances—showed how targeted safeguards and collaboration with regulated providers can preserve access while maintaining financial integrity without disrupting the use of new payment platforms.
Several countries, with IMF guidance, are investing in machine learning to detect anomalies in cross-border financial flows, and others are tightening regulation of virtual asset service providers. Governments are investing in their own capacity to trace crypto transfers, and blockchain analytics firms are often employed to do that. IMF analysis of cross-border flows and the updated FATF rules are mutually reinforcing. If implemented cohesively, they can help digital efficiency coexist with financial integrity. For that to happen, legal frameworks must adapt to enable timely access to digital evidence while preserving due process. Supervisory models need to evolve to oversee both banks and nonbank financial institutions offering cross-border services. Regulators and fintechs should be partners, and sustained multilateral engagement should foster fast, cheap, transparent, and traceable cross-border payments—anchored interoperable standards that also respect privacy.
Governments must keep up. That means investing in regulatory technology, such as AI-powered transaction monitoring and blockchain analysis, and giving agencies tools and expertise to detect complex crypto schemes and synthetic identity fraud. Institutions must keep pace with criminals by hiring and retaining expert data scientists and financial crime specialists. Virtual assets must be brought under AML/CFT regulation, public-private partnerships should codevelop tools to spot emerging risks, and global standards from the FATF and the Financial Stability Board must be backed by national investments in effective AML/CFT frameworks.
Consistent and coordinated implementation is important. Fragmented efforts leave openings for criminals. Their growing technological advantage over governments threatens to undermine financial integrity, destabilize economies, weaken already fragile institutions, and erode public trust in systems meant to ensure safety and fairness. As crime rings adopt and adapt emerging technologies to outpace enforcement, the cost is not only fiscal—it is structural and systemic. Governments can’t wait. The criminals won’t.

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Analysis

Multilateral development banks reaffirm commitment to climate finance, pledge innovative funding for adaptation

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3 weeks ago

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November 13, 2025

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Multilateral development banks have reaffirmed their commitment to climate finance, pledging to scale up innovative funding to boost climate adaptation and resilience. “Financing climate resilience is not a cost, but an investment.” This was the key message from senior MDB officials at the end of a side event organised by the Climate Investment Funds (CIF) on the opening day of the 30th United Nations Climate Conference (COP30) in Belém, Brazil.

The conference runs from 10 to 21 November. During a panel discussion titled “Accelerating large-scale climate change adaptation,” MDB representatives, including the African Development Bank Group, outlined how their institutions are fulfilling Paris Agreement commitments by mobilising substantial and innovative resources for climate adaptation and mitigation. Ilan Goldfajn, President of the Inter-American Development Bank Group, emphasised that “resilience is more than a concern for the future: it is also essential for development today.” He announced that MDBs are tripling their financing for resilience over the next decade, targeting $42 billion by 2030.

“At the Inter-American Development Bank, we are turning preparedness into protection and resilience into opportunity,” Goldfajn added. Tanja Faller, Director of Technical Evaluation and Monitoring at the Council of Europe Development Bank, stressed that climate change “not only creates new threats, but also amplifies existing inequalities. The most socially vulnerable people are the hardest hit and the last to recover. This is how a climate crisis also becomes a social crisis.” Representatives from the Islamic Development Bank, the Asian Infrastructure Investment Bank, the Asian Development Bank, the World Bank Group, the European Bank for Reconstruction and Development,  the European Investment Bank, the New Development Bank and IDB Invest (the private sector arm of the Inter-American Development Bank Group) also shared concrete examples of successful adaptation investments and strategies for mobilising new resources.

Kevin Kariuki, Vice President of the African Development Bank Group in charge of Power, Energy, Climate and Green Growth, presented the Bank’s leadership in advancing climate adaptation and mitigation. “At the African Development Bank, we understand the priorities of our countries: adaptation and mitigation are at the heart of our climate interventions.” He highlighted the creation of the Climate Action Window, a new financing mechanism under the African Development Fund, the Bank Group’s concessional window for low-income countries.

“The African Development Bank is the only multilateral development bank with a portfolio of adaptation projects ready for investment through the Climate Action Window,” Kariuki noted, adding that Germany, the United Kingdom and Switzerland are among key co-financing partners. Kariuki also showcased the Bank’s YouthADAPT programme, which has invested $5.4 million in 41 youth-led enterprises across 20 African countries, generating more than 10,000 jobs — 61 percent of which are led by women, and mobilising an additional $7 million in private and donor funding.

Representatives from Zambia, Mozambique and Jamaica also shared local perspectives on the financing needs of communities most exposed to climate risk. The panel followed the official opening of COP30, marked by a passionate appeal from Brazilian President Luiz Inácio Lula da Silva for greater climate investment to prevent a “tragedy for humanity.”

“Without the Paris Agreement, we would see a 4–5°C increase in global temperatures,” Lula warned. “Our call to action is based on three pillars: honouring commitments; accelerating public action with a roadmap enabling humanity to move away from fossil fuels and deforestation; and placing humanity at the heart of the climate action programme: thousands of people are living in poverty and deprivation as a result of climate change. The climate emergency is a crisis of inequality,” he continued.

“We must build a future that is not doomed to tragedy. We must ensure that we live in a world where we can still dream.” Outgoing COP President Mukhtar Babayevn, Azerbaijan’s Minister of Ecology, urged developed nations to fulfil their promises made at the Baku Conference, including commitments to mobilise $300 billion in climate finance. He called for stronger political will and multilateral cooperation, before handing over the COP presidency to Brazilian diplomat André Corrêa do Lago, who now leads the negotiations.

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