Former Statistician-General of the Federation and ex-CEO of the National Bureau of Statistics (NBS), Dr. Yemi Kale, has shed light on what economists mean when they describe Nigeria’s economy as “stable,” clarifying why such assessments may appear at odds with the lived reality of citizens still grappling with high costs and economic hardship.
Kale’s explanation came in response to debates trailing recent remarks by World Trade Organization (WTO) Director-General, Ngozi Okonjo-Iweala, who, after meeting with President Bola Tinubu in Abuja, said Nigeria’s economy was “now stable.”
While many Nigerians questioned the claim, pointing to the rising cost of food, housing, transport, and healthcare, Kale emphasized that “economic stability” is a technical term that does not necessarily translate to immediate relief for households.
What stability means in economics
According to Kale, stability in economic terms means that key macroeconomic indicators such as inflation, exchange rates, and GDP growth are no longer experiencing sharp or unpredictable swings.
- For instance, if inflation falls from 25% to 12% and remains steady at that level, the economy is considered “stable,” even though prices may still be significantly higher than in previous years.
- He explained that stability reflects predictability and a reduced risk of sudden disruptions, giving businesses, investors, and consumers more confidence to make long-term plans. In essence, stability indicates that the economy has stopped “rocking wildly” after a crisis, but it does not automatically mean that citizens are free from hardship.
Why stability coexists with hardship
Kale stressed that the distinction between stability and improved living standards lies in the timing and distribution of benefits.
According to him, stability is often the first phase after a crisis such as a currency crash or hyperinflation, signaling that the bleeding has stopped.
- However, the high cost of living established during the crisis usually remains, leaving families struggling to cope.
- Furthermore, Kale noted that the positive effects of stability tend to reach businesses and investors first, through stronger balance sheets and improved confidence.
- For ordinary citizens, it can take months or even years before stability trickles down into cheaper goods, better wages, and job creation.
“The pain is real, immediate, and personal,” he said, adding that if stability is not sustained long enough, the risk of slipping back into crisis remains high.
Stability as the first step, not the solution
Summing up, Kale likened economic stability to “stopping a boat from rocking wildly,” while hardship persists because “the boat is still far from shore.” For citizens, this means fewer new shocks may be occurring, but day-to-day struggles remain intense.
He stressed that stability is not sufficient to end hardship, but it is a necessary foundation for recovery.
“The first step to reversing hardship is stability and stopping the bleed,” Kale said, while clarifying that his analysis is “purely technical, not political.”
Backstory
Speaking with newsmen after the meeting, Okonjo-Iweala commended the administration of President Tinubu for the reforms that are restoring stability to Nigeria’s economy.
“The President and his team have worked hard to stabilize the economy.
“The reforms have been in the right direction. The next step is growth, and alongside that, building social safety nets so those feeling the pinch of reforms can get support,” she said.
She added that growth, job creation, and income expansion must go hand-in-hand with measures to cushion the impact of ongoing reforms on vulnerable Nigerians.
Madam Okonjo-Iweala clarified this herself with the follow up statement.
Quite articulate, incisive and accurate analysis… thanks a lot.