In two years, President Bola Tinubu’s reforms have attracted global applause on the strength of their long-term impact on the economy, but they have also pushed several citizens into poverty.
Tinubu, who became president on May 29, 2023, acted swiftly on two critical reforms: the removal of the costly gasoline subsidy and the exchange float. Both reforms have allowed the market to determine who gets what, but they have also triggered galloping inflation and widened poverty.
The world cheered the reforms, describing them as game changers.
Alex Sienaert, chief economist at World Bank Nigeria, said at the launch of the Nigeria Development Update for June 2023 that the petrol subsidy and FX reforms “are historic as they have… stopped Nigeria from going over a fiscal cliff and sets the stage for a new, upward investment, growth, and development trajectory.”
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On the sidelines of the G20 Leaders’ Summit in Brazil in November 2024, Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said: “We have started seeing positive results from our reforms, and the Nigerian people now understand the need for them.”
Economist Andrew Matheny of Goldman Sachs forecast the naira to strengthen to 1,000/$. Goldman Sachs subsequently projected that Nigeria will emerge as the world’s fifth-largest economy by 2075, with a gross domestic product (GDP) of approximately $13.1 trillion ahead of global economic powerhouses such as Germany, the United Kingdom, and Japan.
Richard Montgomery, British High Commissioner to Nigeria, said in 2024 the economic reforms will help to drive prosperity in Nigeria.
“But I also want to put on record that we fully support the big and important economic reforms that are going on in Nigeria at the moment, which we see as essential for the future prosperity of the country, and indeed the economic relationships of many of us here with this major power.”
Richard Mills, his United States counterpart in 2024, said the “reforms are necessary, and we have supported and worked with the administration as they have carried them out.”
The reforms have attracted investments to Nigeria. Foreign portfolio investments in Nigerian equities reached their highest level in four years ($284 million) in September 2024. Foreign investments into the Nigerian economy soared to its highest in at least two years on the back of favourable returns.
The naira moved from the third worst currency in the world to one of the top performing currencies.
“As Nigeria continues to rein in this volatility, it enhances its attractiveness as a destination for foreign capital. Should these reforms persist and deepen, they may lay the groundwork for a more sustainable and investment-friendly FX environment, potentially setting the stage for renewed inflows and a more stable naira in the long run,” Ifeanyi Uba, head of research at Commercio Partners, said.
The twist
However, these are yet to reflect on citizens’ lives. Lagos-based John-Paul Ese earned N200,000 per month as salary in 2022 when he worked as a salesman. He had bought his first Toyota Corolla car the previous year and lived in a one-bedroom flat with his younger sister.
His monthly expenditure was N100, 000 –N120,000 and he would often invest the rest. But his post-subsidy removal life hasn’t been the same. He now spends all his salary before the end of the month, saving and investing none.
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“I even had to ask my sister to move to our parents’ home in Rivers State as I can’t afford to take care of her again,” he said, noting that he has packed his car and shuttles to work every day.
The reforms plunged Nigeria into its worst inflationary stretch in nearly three decades, with headline inflation surging from 22.8 percent in June 2023 to 34.6 percent by November 2024—the highest level in 28 years. The rate, however, eased to 24.48 percent in January 2025, following a rebasing of the consumer price index.
In spite of that, prices of food items from tomato to pepper and rice have risen. Filling a fuel tank of a Toyota car costs between N60,000 and N80,000, and young professionals like Ese can’t afford that.
The World Bank stated this in its latest April 2025 Poverty and Equity Brief that 76 percent of Nigerian rural dwellers live in poverty.
The World Bank acknowledged the limited reach of Nigeria’s $800 million conditional cash transfer programme, noting that, “Nigeria’s failure lies not in its ambition to alleviate poverty but in the architecture and execution of its social policy.”
President Tinubu promoted CNG vehicle conversions to ease the effect of high petrol costs but there aren’t several stations to refill.
With over 1.5 million vehicles on Nigerian roads, conversion centers are still falling short of the target of 500 vehicles per day by the end of 2024. As of now, only around 50 CNG stations are operational nationwide, showcasing the scale of the infrastructure gap.
“The authorities’ policies to stabilise the economy and promote growth are welcomed. However, they must be accompanied by targeted social transfers to support the most vulnerable populations. We recognise the extremely difficult situation that many Nigerians face,” said Julie Kozack, IMF director of communications in Washington DC in March 2025.
