Nigeria’s ambition to build a $1 trillion economy by 2030 is no longer a rhetorical flourish; it is an economic necessity and the administration of President Bola Tinubu appears bent on achieving it. With a population approaching 250 million, rapid urbanisation, and a median age under 20, the country faces a simple equation: grow fast enough to create prosperity or risk deepening fragility. The reforms undertaken over the past thirty-four months signal a serious intent. But if Nigeria is to move from linear progress to geometric expansion, it must confront a missing pillar in its economic architecture: the absence of a broad-based, disciplined credit economy. The starting point is sobering. Nigeria’s GDP, using an estimate of between $360 billion and $400 billion depending on exchange rate assumptions, would need to grow at a compounded annual rate of roughly 15 -18% in nominal dollar terms to reach $1 trillion by 2030. Even allowing for currency stabilisation and moderate inflation, real growth would need to consistently exceed 7 -9% per year, levels Nigeria has rarely sustained outside oil booms. Between 2015 and 2023, real GDP growth averaged under 3%, barely above population growth. Per capita income stagnated. The implication is clear: incremental reform will not suffice. A fundamentally different approach is required to achieve these ambitious targets. To its credit, the government has begun addressing long-standing structural distortions. The removal of fuel subsidies, once costing up of $10 billion annually, has eliminated a major fiscal drain, freed resources for investment & channeled a substantial part to the sub-nationals. Exchange rate liberalisation, while painful in the short term, is correcting a decades-long misallocation of capital driven by artificial currency regimes. The unification of rates has improved transparency, reduced arbitrage opportunities, and created some level of stability . Meanwhile, ongoing tax reforms aim to broaden the base, improve compliance, and shift Nigeria’s tax-to-GDP ratio, currently among the lowest globally at around 10%, closer to emerging-market norms of 15-20%, while remaining progressive and protecting the poor. These were necessary reforms, all of which we at AACS recommended and called for before this administration began in 2023 (AACS Fortnightly-April 10th -2023). The reforms properly implemented were a sine-qua-non to economic recovery and stability . However, they are not enough for the ambitious target of a $1 trillion economy by 2030. The missing link is credit. In advanced economies, credit is more than a financial tool; it is the foundation of consumption, production, and investment. In the United States, household credit (including mortgages, credit cards, and auto loans) is over 70% of GDP. In countries like South Africa, private sector credit is estimated at about 68% of GDP. In Nigeria, the comparable figure is less than 20%. This gap is not abstract; it is visible daily. Nigerian consumers mainly pay cash for things that, elsewhere, would be financed: homes, vehicles, durable goods, education, and healthcare. Businesses, especially SMEs, use retained earnings or informal borrowing rather than structured credit. As a result, demand is suppressed, and scale is constrained. A manufacturer in Lagos, Aba or Kano for instance, does not merely compete on product quality; it competes against the liquidity constraints of its customers and prospects . If most households cannot spread payments over time, demand is artificially capped. Inventory sits longer. Production slows. Hiring is deferred. The entire value chain contracts not because of a lack of need, but because of a lack of financing. A functioning credit economy would reverse this logic. Consumers would gain immediate access to goods and services, smoothing consumption across their income lifecycle. Producers would experience faster inventory turnover, enabling higher production volumes and economies of scale. Financial institutions would expand their balance sheets, intermediating savings into productive lending. Employment would rise across sectors from manufacturing and retail to banking and fintech. The multiplier effects would be substantial. Empirical evidence supports this. A 10 percentage point increase in private-sector credit-to-GDP is associated with a 0.3-0.5 percentage point rise in medium-term GDP growth in many emerging markets. If Nigeria raised its credit penetration from 20% to even 50% of GDP by 2030—a conservative target—the incremental growth impulse could be transformative. But expanding credit without discipline can lead to a crisis. Nigeria’s history serves as a warning. The 2009 banking crisis, which led to the creation of the Asset Management Corporation of Nigeria (AMCON), was driven by reckless lending, poor risk management, and weak enforcement. Non-performing loans rose, confidence declined, and public intervention was needed. The lesson is not to avoid credit but to build it properly. To address this gap, three pillars are essential. First, information. A robust, comprehensive credit bureau system must underpin lending decisions. Today, while Nigeria has made progress with licensed credit bureaus, coverage remains partial and data quality uneven. Millions of Nigerians remain “credit invisible”. Expanding coverage by integrating bank data, mobile money transactions, utility payments, and even rental histories would enable more accurate risk assessment. Digital identity systems, such as the National Identification Number (NIN), must be fully leveraged to create unified credit profiles. Second, enforcement. The cultural and institutional tolerance for default must end. In many advanced economies, failure to repay debt carries tangible consequences: restricted access to future credit, legal action, and reputational damage. In Nigeria, enforcement is often slow and uncertain, encouraging strategic default. It is not unusual to see large and deliberate defaults in retail borrowings with low income borrowers believing that a bank loan or finance is a freebie and an entitlement belonging to ‘ no one ‘ so there is no obligation to repay . It is an entitlement mentality that must be cured. The borrowing public must understand that a thriving credit economy lifts everyone. Strengthening judicial processes for debt recovery, enabling out-of-court settlements, and enforcing collateral rights are critical. Credit must have consequences, both positive and negative. Third, incentives. Lenders need motivation to offer credit beyond large corporates and government-related entities. Risk-sharing tools, like partial credit guarantees for SMEs, can drive more lending. Prudential rules should strike a balance, preventing too much caution from stifling growth. At the same time, regulators must monitor to prevent bubbles in real estate and consumer lending. Technology is a strong accelerator. Nigeria’s fintech sector, already vibrant, can greatly expand credit access. Digital lenders use alternative data and machine learning to serve previously excluded groups. Mobile platforms can provide microcredit at scale at lower cost. Regulation must keep up to prevent predatory lending and protect consumers. The potential macroeconomic impact is profound. Consider a scenario in which consumer credit penetration rises from near-zero to 20% of GDP over five years. Durable goods sectors, such as appliances, electronics, and automobiles, would likely see demand growth of 20 -30% annually. Housing finance, currently underdeveloped, could unlock a construction boom, with strong backward linkages to cement, steel, and labour markets. SME lending could formalise and scale millions of small businesses, increasing productivity and tax revenues. Financial institutions would benefit most. Lending portfolios would grow, increasing interest income. Fee-based services, payments, insurance, and wealth management would also expand. A deeper, more fluid financial system would attract foreign investment and strengthen capital. Job growth in finance would increase, creating skilled positions. But the transition must be managed carefully. While expanding credit can bring transformative growth, rapid credit expansion also presents risks. It can fuel inflation if supply does not keep pace with demand, and it can exacerbate inequality if access is skewed toward higher-income groups. Therefore, policymakers must carefully align credit growth with supply-side reforms: improving infrastructure, reducing logistics costs, and enhancing productivity in key sectors such as agriculture and manufacturing. Agriculture, in particular, illustrates the stakes. Insecurity and financing constraints have limited output, contributing to food inflation. A well-structured agricultural credit system combining input financing, insurance, and guaranteed offtake could increase yields, stabilise prices, and boost rural incomes. This would not only support GDP growth but also address one of Nigeria’s most pressing social challenges. Ultimately, the question is not whether Nigeria can reach a $1 trillion economy, but how. The current reform trajectory addresses necessary conditions: fiscal sustainability, exchange-rate realism, and tax mobilisation. But the sufficient condition for the mechanism that translates these reforms into broad-based growth is credit. A disciplined, inclusive credit economy would unlock suppressed demand, accelerate production, and deepen financial intermediation. It would transform Nigeria from a largely cash-based, liquidity-constrained system into a dynamic, forward-looking economy where consumption and investment are aligned with future income. The risks are real. Without strong institutions, credit can misallocate capital and create instability. But with the right architecture information, enforcement, and incentives, these risks can be managed. The prize is equally real. If Nigeria can raise its private-sector credit to GDP ratio to even half that of its emerging market peers, while sustaining ongoing reforms, the path to $1 trillion becomes plausible rather than aspirational. Growth would no longer be hostage to oil prices or episodic reforms, but driven by the everyday economic activity of millions of households and businesses. In the end, economic transformation is less about grand declarations than about the quiet mechanics of how people buy, sell, borrow, and repay. Nigeria has begun the hard work of reform. To finish the job, it must make credit not just available but reliable, disciplined, and universal.
Abina. Banker, Economist & Consultant is a member of the of the Presidential Fiscal Policy& Tax Reform Committee & The Ekiti State Economic Mgt Team