Technical reforms not enough without institutional change
Nigeria has never lacked reform blueprints. From the mid-2000s banking consolidation to fuel subsidy removals, privatisation, and exchange-rate adjustments, policymakers have repeatedly promised turning points.
Yet for most Nigerians, these reforms have felt like waves that rise and fall without lifting living standards. The pattern is familiar: bold technical fixes are introduced, optimism briefly spikes, and then the gains evaporate. The real issue is not the absence of ideas, but the weakness of the institutions meant to carry them through.
This is the context in which the 31st Nigerian Economic Summit (NES #31), scheduled for October in Abuja, assumes unusual significance.
Themed “The Reform Imperative: Building a Prosperous and Inclusive Nigeria by 2030”, the summit will focus on three guiding pillars: reforms, resilience, and results and explore sub themes such as industrialisation, investment flows, infrastructure, inclusion, and institutional strengthening.
Among these, the emphasis on building strong institutions may prove to be the most critical.
When institutions fail, reforms falter
Policy inconsistency, corruption, fragile regulatory frameworks, and poor governance have long undermined Nigeria’s economic transformation. The 2014 power sector privatisation promised to unlock billions in investment, yet the absence of a robust regulatory regime and entrenched governance flaws left households facing blackouts and businesses reliant on diesel generators.
In 2016, the adoption of a managed float for the naira was meant to stabilise the currency, but opaque implementation and conflicting signals from regulators deepened investor anxiety.
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More recently, the removal of fuel subsidies and the unification of exchange rates under President Bola Tinubu in 2023 were praised by multilateral lenders, yet the immediate social costs — soaring transport fares, higher food prices, and suppressed wages — have left citizens sceptical that reforms work for them.
The lesson is clear: technical reforms cannot thrive in the absence of credible institutions. Without trust in governance, every policy shift is seen not as an opportunity but as a threat. As Niyi Yusuf, Chairman of NESG, recently argued, reforms may deliver a short-term cushion, but only institutions can guarantee long-term results.
He went further, warning: “What is required now is a second wave of reforms; structural, deliberate, and transformative.”
Faruq Quadri, CEO of SPEC-MATRIX, added that institutional weakness remains the bottleneck for every well-intentioned policy and economic reform.
Nigeria’s institutional deficit
Nigeria’s institutional fragility is not abstract. The judiciary struggles with delays and perceived political influence, eroding contract enforcement. Regulatory agencies, from power to aviation to oil, are often underfunded and vulnerable to capture by vested interests.
Anti-corruption campaigns have been high-profile but inconsistent, with enforcement appearing selective. This combination has weakened both domestic and foreign investor confidence, while also fuelling public cynicism.
Data underline the scale of the challenge. Nigeria ranked 145th out of 180 countries in Transparency International’s 2023 Corruption Perceptions Index, slipping behind several African peers. The World Bank’s Worldwide Governance Indicators show persistent weaknesses in regulatory quality and rule of law.
Meanwhile, the IMF has repeatedly highlighted policy reversals and lack of coordination as constraints on growth. These institutional gaps explain why Nigeria’s economy, despite its scale and resource base, has struggled to sustain growth above population expansion for much of the past decade.
As Yusuf told business leaders earlier this year: “Nigeria will only rise when we produce what we consume and consume what we produce.” That vision, however, demands institutions strong enough to enforce discipline and sustain reform momentum.
Reform without institutions is reform without results
At NES #31, delegates will no doubt debate industrialisation and investment flows, but the more fundamental question is whether Nigeria can build institutions capable of sustaining these reforms. Without stronger oversight, credible regulation, and greater policy continuity, the cycle of reform and relapse is likely to persist.
The stakes could not be higher. Nigeria’s median age is just 18, with millions entering the labour market each year. If institutions remain weak, reforms will fail to generate the jobs and opportunities needed to absorb this demographic surge. On the other hand, credible institutions can unlock the benefits of Nigeria’s youthful population, abundant resources, and growing markets.
For Nigeria, the summit offers a chance to break the cycle. Reform is imperative, but reform without institutions is reform without results.
