BUSINESS & ECONOMY

The Economic Outlook for Nigeria in 2025: Challenges and Possibilities Amid Uncertainty

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1 month ago

January 9, 2025

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By Baba Yunus Muhammad

As Nigeria enters 2025, the future remains uncertain. Amid mounting challenges, citizens are grappling with escalating food prices, a crumbling currency, and systemic instability. What seemed like renewed hope at the beginning of President Bola Ahmad Tinubu’s administration appears, to many, as an elusive dream. The reality has been marked by pain, not progress, and the toll on the average Nigerian is growing.

The State of the Nation: Rising Struggles and Diminished Lives

In the past year, Nigerians faced unprecedented economic turbulence. The removal of fuel subsidies resulted in a staggering 500% increase in petrol prices. This, coupled with the deregulation of the foreign exchange market, saw the naira’s value plummet, depreciating over 100% between October 2023 and October 2024. To mitigate the effects, the Central Bank of Nigeria hiked interest rates from 15.5% in October 2023 to 27.25% in September 2024 in an effort to curb inflation, which had spiraled to a staggering 34.6% by November 2024.

Despite these efforts, the average Nigerian is witnessing the decline in their standard of living. Everything is becoming more expensive—food, transportation, energy, healthcare, and education. People are no longer just talking about survival; they are questioning how much longer they can endure.

A harrowing illustration of this suffering came in December 2024 when scores of Nigerians tragically lost their lives in a stampede while attempting to access food palliatives. The incident, which occurred in several locations nationwide, serves as a grim reminder of how dire the situation has become. When access to basic sustenance leads to such tragic outcomes, it paints a clear picture of a nation in crisis.

Moreover, new initiatives such as tax reforms, a student loan scheme, and an increased minimum wage are announced, but their real impact has yet to be felt. Rather than bringing prosperity, these reforms have bred frustration and discontent. Widespread protests, such as the August 2024 #EndBadGovernance movement, indicate that the patience of the Nigerian people is rapidly running out. The administration’s calls for patience and assurances of eventual positive outcomes only seem to deepen the sense of disillusionment.

The Illusion of Progress: Is Hope Enough?

While certain economic measures, like the removal of subsidies, were praised internationally for addressing long-standing issues, they failed to alleviate the immediate hardships faced by Nigerians. The administration’s ongoing commitment to these policies has sparked debates over whether true reform is possible or if Nigerians are simply becoming the collateral damage of ill-conceived strategies. As a result, the country finds itself trapped in a cycle of self-inflicted economic hardship, teetering on the edge of an economic disaster unless fundamental changes are made.

The question arises: Can Nigeria truly rebound from this abyss? Historically, misguided policies, no matter how well-intentioned, have often paved the way for suffering. Recall the economic policies of the former Buhari administration, hailed at the time as transformative, only for their implementation to worsen inequality, stifle innovation, and deepen poverty.

The current trajectory shows eerie similarities to this past failure. Far too often, policies are drafted with little regard for Nigeria’s unique economic realities, and instead, are designed to appease international bodies or satisfy external stakeholders. However, the current challenges demand more than foreign validations—they call for homegrown solutions grounded in an understanding of Nigerian lived experiences.

An Alternative Path: The Key to Sustainable Prosperity

Nigeria is blessed with an abundance of intellectual capital, innovation, and human resources capable of guiding the country to a brighter future. Across various sectors—agriculture, technology, healthcare, and education—Nigerians have consistently proven their ingenuity and determination. However, leadership must step aside from entrenched thinking and open itself to alternative ideas. The long-term prosperity of Nigeria cannot be built on policies that dismiss dialogue and stifle innovation.

A new approach to policy-making is required—one that prioritizes sustainable growth through people-centered policies. This can be achieved by fostering an environment that encourages entrepreneurship, innovation, and sustainable job creation. Unlike the current tactics that fail to provide relief, bold economic leadership must cultivate self-reliance, ensure that resources are utilized optimally, and build upon Nigeria’s strengths.

Growth should not be seen as a sacrifice. Economic development that benefits the people need not come at the cost of their suffering. Nigerians must not continue to bear the brunt of failed policies as if enduring hardship is a necessary path to a better future. For the people to feel the effects of reform, policies must address immediate needs, reduce the cost of living, create job opportunities, and ensure that essential services like healthcare and education are not out of reach.

A concrete focus on rebuilding essential infrastructures, such as energy and transportation networks, can uplift Nigeria’s manufacturing sector and make the country a competitive force on the global stage. Importantly, policies must focus on equitable growth—ensuring that the benefits of economic progress are felt by all Nigerians, especially those in rural areas who bear the brunt of inflation and rising living costs.

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BUSINESS & ECONOMY

Trump’s Tariff Battles: The Global Fallout

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5 days ago

February 5, 2025

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Baba Yunus Muhammad

Tariffs are a form of taxation on goods crossing national borders. While proponents argue that they can protect local industries by making imports more expensive, most economists view them as a blunt instrument that can harm both the target country and the domestic economy while also escalating trade conflicts. Here’s an overview of Trump’s latest tariff threats and their potential impact worldwide.

China: Retaliation and Countermeasures

During his campaign, Trump threatened a 60% tariff on Chinese goods, but the actual figure has been set at 10%. When combined with existing tariffs, this brings the average rate on Chinese imports to between 20% and 30%. Trump claims these measures are aimed at pressuring Beijing to crack down on the smuggling of fentanyl and its precursors into the US. However, analysts see broader economic motives at play.

With 14% of China’s exports directed to the US, the impact of Trump’s tariffs is somewhat limited. Many Chinese firms have already relocated parts of their supply chains to circumvent these barriers. Still, Beijing has responded forcefully by imposing 15% tariffs on US coal and liquefied natural gas, and 10% tariffs on crude oil, farm equipment, and large vehicles. Additionally, China has imposed export restrictions on critical materials such as tungsten and tellurium, which are vital for US industries.

Perhaps more consequentially, China has initiated an anti-trust investigation into Google, raising concerns that this could be the beginning of a broader crackdown on American tech firms operating in the country. The deepening divide between the world’s two largest economies could have long-term global repercussions.

Mexico: Short-Term Relief, Long-Term Uncertainty

With 83% of Mexico’s exports going to the US, the impact of tariffs would have been significant. However, a last-minute deal has paused the proposed tariffs for a month.

While the official justification for the tariffs was Mexico’s alleged cooperation with criminal organizations facilitating illegal immigration and fentanyl trafficking, critics argue that the real motivation is Trump’s opposition to trade deficits. Economist Paul Krugman has warned that measures designed to eliminate trade deficits could also deter foreign investment.

In response, Mexican President Claudia Sheinbaum dismissed Trump’s claims as baseless but agreed to deploy 10,000 troops to the border. The US, in turn, has pledged to curb the flow of high-powered weapons into Mexico. Despite this temporary resolution, business leaders worry about long-term instability, with Brian Winter, a Latin America expert, warning that companies may reassess Mexico’s role in North American supply chains.

Canada: Last-Minute Reprieve Amid Economic Anxiety

A temporary pause on tariffs against Canada was announced following urgent discussions between Trump and Prime Minister Justin Trudeau. Given that 77% of Canada’s exports go to the US, this was a crucial development.

The justification for targeting Canada—stemming the flow of fentanyl—was unconvincing, as only 19kg of the drug was seized at the US-Canada border last year compared to 9,600kg from Mexico. However, the vagueness of Trump’s objectives may actually work in his favor, allowing him to declare victory without a clear benchmark.

Canada had prepared retaliatory tariffs on $106 billion worth of US goods, primarily from Republican-leaning states. Meanwhile, a grassroots movement in Canada has emerged in response to Trump’s threats, with campaigns encouraging domestic purchases and branding pro-Trump figures as “Vichy Canadians.”

European Union: Preparing for Retaliation

Trump has vowed that new tariffs on the European Union will “definitely happen,” citing the US’s goods trade deficit with the bloc, which he claims exceeds $300 billion. However, official data from 2023 puts the deficit at approximately $160 billion. Furthermore, when services are included, the US actually runs a trade surplus of $107 billion with the EU.

In anticipation of Trump’s measures, the European Commission has devised a “carrot and stick” strategy—offering increased imports of US liquefied natural gas while preparing retaliatory tariffs on American goods. The outcome of these negotiations will be pivotal for transatlantic trade relations.

United Kingdom: A Balancing Act

While Trump has suggested that the UK might face tariffs, he also indicated that a resolution could be found, citing his positive relationship with Prime Minister Keir Starmer. For now, this uncertainty leaves Britain in a precarious position.

With 68% of the UK’s exports being services, which are not subject to tariffs, the immediate impact may be lower than for other countries. However, the UK’s trade relationship with the EU complicates matters. If Trump’s tariffs escalate into a full-scale trade war, Britain could be forced to choose between aligning with the US or the EU—its largest trading partner.

Conclusion: A Risky Game

Trump’s tariff threats have created economic uncertainty across multiple regions. While some countries have secured temporary relief, the long-term impact of these measures remains unclear. If trade tensions continue to escalate, the global economy could face significant disruptions, with repercussions extending far beyond the US and its trading partners.

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BUSINESS & ECONOMY

African Nations Target 300 Million New Power Connections by 2030

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2 weeks ago

January 30, 2025

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In a bold initiative to address Africa’s persistent electricity deficit, several African nations have committed to opening up their energy sectors to attract investment and provide electricity to 300 million people by 2030. This effort, known as Mission 300, was launched in April by the World Bank and the African Development Bank (AfDB) and aims to mobilize at least $90 billion in funding from multilateral banks, development agencies, private investors, and philanthropies.

Bridging Africa’s Energy Gap

Africa remains the region with the highest number of people lacking access to electricity, a major hindrance to economic growth and development. To tackle this, Nigeria, Senegal, Zambia, and Tanzania, among other nations, have pledged to reform their electricity utilities, integrate more renewable energy, and increase national electrification targets. These commitments were made at an energy summit attended by African heads of state in Tanzania’s commercial capital.

Kevin Kariuki, Vice President for Infrastructure at the AfDB, emphasized the need for cost-effective expansion and rehabilitation of national electricity grids. “We want to expand and rehabilitate our electricity grids using the least cost possible,” Kariuki stated.

Financing the Mission

World Bank President Ajay Banga highlighted that the initiative’s success hinges on unlocking significant private sector investment. The World Bank plans to contribute $30-40 billion, while the AfDB will provide an additional $10-15 billion, with the remainder expected from private investors and other sources.

To encourage private sector participation, the World Bank will only disburse funds to countries that implement necessary regulatory and policy reforms. Historically, investors have been hesitant due to concerns over unfriendly regulations, bureaucratic delays, and currency risks.

Renewable Energy at the Core

Half of the planned new electricity connections will be through expanding national grids, while the other half will rely on renewable energy sources, including solar and wind-powered mini-grids. This approach aligns with Africa’s growing push toward sustainable energy solutions, reducing dependence on fossil fuels and enhancing energy resilience. Ajay Banga underscored the developmental significance of electrification, noting that access to power is a key enabler of economic growth, job creation, and poverty reduction.

Looking Ahead

As African nations embark on this ambitious journey, the success of Mission 300 will depend on effective implementation, transparent governance, and sustained investor confidence. If successful, this initiative could mark a turning point in Africa’s economic transformation, unlocking new opportunities for businesses and communities across the continent.

The coming years will be critical in determining whether these commitments translate into tangible results, providing millions of Africans with the electricity needed to power industries, businesses, and households.

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Pakistan’s Bold Gamble: Can it Build a Riba-Free Economy?

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2 weeks ago

January 30, 2025

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By Aamer Yaqub

Imagine a world where money doesn’t just grow—it heals. That’s the vision 2,000+ global leaders brought to life at the 8th World Islamic Economics and Finance Conference (WIEFC) with Islamic Finance Trends 2024 in Lahore this January. Forget stuffy lectures—this was a revolution. Pakistan, often overlooked in global finance debates, suddenly became the heartbeat of a $4.5 trillion ethical finance movement. From AI tools sniffing out hidden interest to ‘green Sukuk’ funding hurricane-proof homes, this conference didn’t just talk about change—it blueprinted it.

Why should you care? Whether you’re a student, investor, or just tired of Wall Street’s greed-first mindset, Islamic Finance Trends 2024 is reshaping how money works for everyone. Think climate action funded by ethical bonds, apps that calculate Zakat in seconds, and microloans lifting farmers out of poverty—without interest.

Stick around. We’re breaking down the conference’s biggest reveals, from Pakistan’s bold legal reforms to the tech tools making ethical finance as easy as ordering Uber Eats. Spoiler: This isn’t just about halal banking—it’s about building a financial system that doesn’t leave anyone behind.

Pakistan’s Legal Revolution—A Model for the World

Pakistan’s bold legislative reforms have turned heads globally. The 2022 Federal Shariat Court (FSC) ruling, which declared interest-based systems unconstitutional, set off a chain reaction. By 2024, the 26th Constitutional Amendment cemented this shift, mandating a full transition to Shariah-compliant finance by 2028. But what does this mean in practice?

Pakistan’s Islamic banking assets soared to 50 billion in 2024, up from 30 billion in 2022. This growth now represents 22% of the nation’s total banking sector, with projections hitting 35% by 2027. Analysts attribute this surge to regulatory incentives, including tax breaks for Shariah-compliant institutions and public awareness campaigns.
Globally, the Islamic finance industry expanded by 14% in 2023, driven by Sukuk issuances worth 250 billion a record high. Saudi Arabia’s12 billion sovereign Sukuk and Indonesia’s blockchain-based offerings contributed significantly.

Malaysia, a pioneer in Islamic finance with a $900 billion industry, recently signed a knowledge-sharing pact with Pakistan. “Their regulatory framework is a gold standard,” noted Bank Negara Malaysia’s governor, citing Malaysia’s dual banking system, which allows conventional and Islamic banks to operate side-by-side. Key features include:

Shariah Advisory Councils: Independent bodies that audit financial products.
Tax Neutrality: Equal tax treatment for Islamic and conventional instruments.

Saudi Arabia’s Vision 2030 has allocated $1.2 billion to develop fintech solutions compliant with Shariah principles. The Saudi Central Bank (SAMA) launched a sandbox in 2023, testing 40+ startups focused on digital Zakat platforms and AI-driven Murabaha contracts.

Dr. Hussain Qadri’s Vision: Beyond Compliance

In his keynote, Dr. Hussain Mohi-ud-Din Qadri warned against “checklist Islamization.” He argued:

“Replacing ‘interest’ with ‘profit’ in contracts isn’t enough. True Islamic finance must dismantle systems that perpetuate inequality.”

His speech highlighted Pakistan’s new Zakat-based social safety net, which redistributes 2.5% of assets annually to 8 million low-income families. The program uses biometric verification to prevent fraud, ensuring 98% of funds reach intended recipients.

Converting Pakistan’s $130 billion interest-based debt into Shariah-compliant instruments is a Herculean task. The solution? Asset-backed Sukuk—a financial instrument that ties returns to tangible assets like infrastructure or renewable energy. Unlike conventional bonds, Sukuk holders own a share of the asset, aligning with Islam’s prohibition of speculative risk.

In March 2024, Pakistan issued $2 billion in green Sukuk to fund wind farms in Sindh. The offering was oversubscribed by 300%, attracting investors from the UAE and Singapore. By 2025, these projects are expected to power 1.2 million homes and cut carbon emissions by 4.5 million tons annually. Key terms:

Tenure: 10 years.
Profit Rate: 7% annually, tied to energy sales.
Guarantor: International Finance Corporation (IFC).

Nigeria: Lagos State’s $1.25 billion Sukuk funded the Lekki Deep Sea Port, creating 170,000 jobs. Investors receive profits from port operations, with returns averaging 9% since 2024.
Indonesia: The world’s first blockchain Sukuk raised $500 million in 2024, with 60% of buyers under 35. Built on Ethereum, the platform allows real-time tracking of proceeds.
Germany: Tesla’s Berlin Gigafactory secured €750 million via hybrid Sukuk, blending Islamic finance with ESG principles. Proceeds fund solar panel installations and worker housing.

In Punjab, a pilot project offers micro-Sukuk to small farmers. Instead of loans, investors receive a share of harvest profits. Early results:

40% rise in crop yields due to better equipment access.
Default rates below 2%, compared to 15% for traditional microloans.
Farmers like Ali Raza, 42, report higher incomes: “I used to pay 20% interest. Now, I share 10% of my wheat profits—it’s fairer.”

Education Crisis—Building the Next Generation of Experts

The Islamic finance talent gap is staggering. With 1.9 billion Muslims worldwide, the industry needs 1 million new professionals by 2030—but current graduation rates meet only 30% of demand.

Since 2006, Kuala Lumpur’s International Centre for Education in Islamic Finance (INCEIF) has trained 25,000 professionals across 100 countries. Its secret? A curriculum blending Shariah, finance, and tech. Courses include:

Fintech Ethics: Balancing AI with Shariah principles.
Climate Finance: Structuring green Sukuk.
Pakistan’s new National Islamic Finance Development Fund (NIFDF) aims to replicate this, targeting 10,000 graduates by 2030. The fund partners with 15 universities to offer scholarships and internships.

Egypt’s NowPay: This AI platform offers “halal investing” tutorials to 500,000 users monthly. Interactive modules simulate real-world scenarios, like screening stocks for Shariah compliance.
Saudi Arabia’s Hala: A robo-advisor that screens 10,000+ stocks in real-time using algorithms vetted by scholars. Users grew by 300% in 2024.

A 24-year-old graduate of Lahore’s Islamic Finance Academy, Rahman now designs Sukuk for a Dubai-based bank. “My internship at Malaysia’s CIMB Islamic changed everything,” she says. “We need more cross-border programs.” Rahman’s team recently structured a $500 million Sukuk for a Saudi solar project, integrating ESG metrics.

Ethical Finance Goes Global—Unexpected Adoption

Islamic finance is no longer confined to Muslim-majority nations. From London to Tokyo, ethical banking is resonating with ESG-focused millennials.

Launched in 2024, Britain’s first fully Shariah-compliant pension fund attracted £300 million in six months. “Even non-Muslims are opting in,” says fund manager Amina Khan. The fund excludes companies with debt-to-asset ratios above 33%, aligning with Shariah’s risk-sharing ethos. Top holdings include Unilever and Nestlé, both screened for ethical supply chains.

Goldman Sachs’ Islamic ESG ETF saw $1.2 billion in inflows in Q1 2024, outperforming conventional funds by 8%. The ETF uses a dual screening process:

Shariah Compliance: No alcohol, gambling, or interest-based income.
ESG Metrics: Companies must score B+ or higher on climate audits.

Toyota’s $500 million Sukuk funded a hydrogen-powered vehicle plant in Osaka. Meanwhile, 40% of Japanese homebuyers now consider “ethical financing” a priority—up from 12% in 2020. Firms like Japan Islamic Finance Consultancy (JIFC) facilitate Musharaka (partnership) agreements, where banks and buyers co-own properties.

Pakistan’s 2028 Roadmap—Bold or Overambitious?

Dr. Qadri’s WIEFC address laid out a three-pillar strategy:

National Islamic Finance Development Fund:
- $200 million pool with 30% reserved for women-led startups.
- First project: A blockchain Zakat platform to track donations from source to beneficiary. Pilot launches in Karachi in 2025.
Regulatory Sandbox:
- Testing AI Shariah auditors that scan contracts in seconds. The AI cross-references 50+ scholarly opinions to flag non-compliant terms.
- Pilot with Karachi’s Stock Exchange begins Q3 2025.
Rural Inclusion:
- 15 million unbanked Pakistanis to gain mobile Islamic banking access by 2027.
- Partnering with China’s Alipay to deploy 10,000 agent networks in villages. Agents earn commissions for onboarding users.

Skeptics: “Egypt took 15 years; Pakistan’s 2028 deadline is reckless,” argues Cairo-based economist Dr. Farid. He cites Egypt’s 2004-2019 transition, which required rewriting 120+ laws.
Supporters: “Iran eliminated interest in 18 months post-1983,” counters Dr. Qadri. The Central Bank of Iran replaced interest with “expected profit rates,” though critics argue this is semantics.

Climate Action—The Unlikely Role of Islamic Finance

A surprise WIEFC theme was climate change. With 63% of Sukuk funding green projects, ethical finance is becoming a climate ally.

In March 2024, the UAE’s $1.5 billion green Sukuk for Dubai’s Mohammed bin Rashid Solar Park sold out in 3 hours. The project will offset 6.5 million tons of CO2 yearly—equivalent to taking 1.4 million cars off roads. Investors include BlackRock and Norway’s sovereign wealth fund.

After 2022’s catastrophic floods, Pakistan launched Qard al-Hasan (benevolent loans) for rebuilding. Features:

0% interest, 5-year repayment grace period.
200,000 homes rebuilt by 2024, using climate-resilient designs like raised foundations and bamboo frames.

Technology—A Double-Edged Sword

As AI reshapes finance, WIEFC speakers debated: Can algorithms uphold Shariah ethics?

Bahrain’s Rain: A crypto exchange screening tokens for Shariah compliance. Rain’s scholars reject tokens linked to gambling or excessive debt.
Pakistan’s Nayapay: Mobile app offering AI-driven Zakat calculations to 2 million users. The app scans bank statements and suggests donations based on income and assets.

Dr. Kamarul Zaman Yusoff warned:

“Technology can’t replace scholars. An AI might miss the maqasid (higher purpose) of a transaction.” He cited a 2024 case where an AI approved a contract with hidden interest (Riba), later overturned by scholars.

Lagos State Governor Babajide Sanwo-Olu:

“Our Sukuk-funded port proves Islamic finance can drive development without debt traps. We’re replicating this model for schools and hospitals.”

France’s Ethical Banking Experiment

Société Générale’s Paris branch now offers Shariah-compliant mortgages. Client Marie Dupont:

“I’m not Muslim, but I prefer their transparent pricing. No hidden fees—just a fixed profit rate.”

Finance Minister of Indonesia Sri Mulyani Indrawati:

“Young investors want tech and ethics. Blockchain Sukuk delivers both. Our next step? Tokenizing Waqf (endowment) assets.”

The WIEFC 2025 made one truth undeniable: Ethical finance isn’t a niche—it’s the future. As Dr. Qadri concluded:

“Profit and piety can coexist. Our task is to build systems that honor both.”

What began in Pakistan’s flood-ravaged villages with interest-free Qard al-Hasan loans now echoes on Wall Street through Goldman Sachs’ billion-dollar Islamic ETFs. Islamic Finance Trends 2024 aren’t just reshaping markets—they’re rewriting the rules of ethical wealth. From Saudi Arabia’s $12 billion green Sukuk funding solar megaprojects to Indonesia’s blockchain-powered bonds attracting Gen Z investors, this year has proven one truth: money can uplift communities and portfolios when guided by conscience.

Pakistan’s bold legal reforms—eliminating Riba by 2028—show how nations can balance faith and finance. Malaysia’s education hubs and Nigeria’s Sukuk-funded ports prove this isn’t a niche movement. Even skeptics can’t ignore the numbers: a $4.5 trillion industry growing 14% annually, 63% of Sukuk funding climate projects, and apps like Egypt’s NowPay making halal investing as easy as TikTok.

But the real win? Islamic finance’s DNA—zero interest, shared risk, and ESG alignment—is pushing all finance toward fairness. Whether you’re a farmer in Punjab accessing micro-Sukuk or a Tokyo salaryman choosing ethical mortgages, 2024’s trends offer a roadmap: profit doesn’t have to come at humanity’s expense.

Courtesy: Halal Times

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