Economic reforms are universally measured by their impacts on the living standards of ordinary citizens, but President Bola Tinubu judges his reforms by macro-economic statistics that have absolutely no bearing on the wellbeing of ordinary Nigerians. More than three years after their introduction, Tinubu’s economic reforms have had devastating social consequences, deepening poverty, hunger and misery across Nigeria. But now, just over two months before the people decide whether to re-elect him for a second term, President Tinubu has suddenly realised that his policies have immiserated ordinary Nigerians, and, recently, announced “plans” to ameliorate their pains. However, those “plans” are too little, too late; and smack of cynical pre-election tactics.
The most frustrating thing about President Tinubu’s economic reform is his refusal to recognise and acknowledge the central flaw of his flagship policies: the withdrawal of the fuel subsidy and the scrapping of the fixed exchange rate regime. The two policies are, in themselves, not the issue. Both the fuel subsidy and the fixed exchange-rate regime were riddled with massive corruption. Moreover, the subsidy imposed a significant fiscal burden, partly due to subsidy scams, while the pegged currency triggered massive capital flight and the haemorrhaging of foreign exchange. So, there was a strong economic case for reform.
But here’s the issue. Every policy has costs and benefits, and some produce serious unintended consequences. Sound policymaking involves properly anticipating the adverse consequences of a proposed policy and putting in place adequate measures to mitigate those consequences, particularly ensuring effective protection for vulnerable citizens. For instance, in the UK, the government uses Impact Assessments, universally recognised tools for sound policymaking, to evaluate the economic, social and environmental effects of any major policy or legislative proposal. Based on a cost-benefit analysis, the Impact Assessments quantify and weigh expected costs, benefits and risks to the economy, businesses and individuals, thereby enabling the government to design appropriate mitigating measures.
However, the concept of Impact Assessments is completely alien to policymaking in Nigeria; and with a president like Tinubu, who acts impulsively, weighing the costs, benefits and risks of policies is never part of any reform design. Indeed, President Tinubu was absolutely fixated on the benefits of removing the fuel subsidy and scrapping the pegged exchange rate, completely ignoring the other side of the ledger. He gave not an iota of thought to, or cared a hoot about, the knock-on effects of the new policies on the livelihood of ordinary Nigerians. Now, there have been some macroeconomic improvements, although some are not linked to the reforms. For instance, “high oil prices”, as the World Bank observed, “strengthened export earnings and contributed to a larger current account surplus.” But some benefits have resulted directly from Tinubu’s reforms.
The removal of the petrol subsidy has dramatically increased gross federation revenues, reportedly raking in about N15 trillion since 2023, when the subsidy was removed. The massive devaluation of the naira, triggered by the scrapping of the fixed exchange rates, has made non-oil exports cheaper, resulting in a record $6bn export revenue in 2025. Furthermore, exchange rate flexibility, coupled with the CBN’s hiking of interest rates, has brought in huge foreign portfolio inflows, further boosting the external reserves, which rose above $54bn in September this year. Yet, it would be utterly wrong to judge the success of President Tinubu’s economic reforms merely by macroeconomic indicators, such as higher portfolio inflows and higher external reserves, without considering the adverse effects of the naira’s massive devaluation, which creates imported inflation through increased domestic costs of imported goods and inputs, and persistently high interest rates, which raise the borrowing costs for businesses, undermining their profitability.
Truth be told, despite the government’s claims of macroeconomic stability, the fundamentals are weak, not strong, although things are not as volatile as they were under the Buhari administration. With the exchange rate still at about N1,400/$, compared to N470/$ before Tinubu floated the naira, or with the interest rate still at 23 per cent, only recently as high as 27 per cent, it’s hard to talk of macro-economic stability or strong fundamentals. And GDP growth at 4.2 per cent won’t engender meaningful prosperity in Nigeria. What’s more, even the much-trumpeted higher foreign reserves still cover less than seven weeks of imports, just over half the 12-week benchmark. Add all this together, “Nigeria’s recovery is shallow and risky”, as SBM Intelligence, the respected market research firm, observed in a recent report.
But the weakest link in President Tinubu’s economic reform is its utter lack of people-oriented focus, its absolute lack of a human face. The combined effects of the removal of the fuel subsidy and the floating of the naira have massively reduced household welfare, owing to higher transport costs, higher food prices and low or even non-existent disposable incomes.
According to the World Bank, 63 per cent of Nigerians now live below the poverty line, while nearly 30 million suffer from food insecurity. Sadly, while the government is flush with money from massive subsidy savings, huge borrowings, higher capital inflows and stronger revenue mobilisation, virtually nothing has been done over the past three and a half years to lift ordinary Nigerians out of poverty or to even protect the most vulnerable. One of President Tinubu’s recent election campaign adverts says: “From reform to prosperity”. But it’s prosperity for the few, for the politically connected, not for ordinary Nigerians. As the IMF has observed, there’s an utter lack of transparency and accountability regarding the use of the subsidy savings, except that everyone can see with the naked eye the conspicuous consumption and profligacy of political office holders and ruling-party officials, such as the recent distribution of brand-new Toyota Prado SUVs, each reportedly costing N145million, to APC youth leaders for election mobilisation!
All the above leads us to President Tinubu’s recent initiatives purportedly aimed at tackling the cost-of-living crisis in Nigeria. On October 8, the Presidency announced a 30-day N66 petrol discount under which NNPC Retail would forgo its petrol retail profit margin to cushion consumers against rising fuel prices. Even if this policy was fully implemented across Nigeria, which wasn’t the case, petrol was still selling for about N1,400 per litre in October, the period supposedly covered by the intervention, compared to N197 per litre before Tinubu removed the fuel subsidy. Then, on October 22, the National Economic Council, chaired by the vice president, endorsed a 90-day ‘relief’ action plan, covering five areas, namely, food affordability, tax harmonisation, completion of high-impact projects, removal of investment bottlenecks and household support. Given that some of these measures are structural in nature, one wonders why they are linked to a 90-day emergency relief plan.
But regarding household support, if a recent WhatsApp message must be believed, the Federal Government has set up a National Family Support Scheme. The message reads: “Due to high level of complaints from Nigerian families, President Bola Ahmed Tinubu has ordered the opening of a National Family Support Allowance portal. Every entitled Nigerian would receive N185,000 for three months. APPLY NOW”! I clicked on the link provided, and it took me to an application page where some claimed to have received the money. One remarked: “Tinubu is trying oo. Thank you, my president, I just received my own this morning.” Of course, none of this is immediately verifiable. But assuming the cash transfer is real, it’s undoubtedly voter inducement, coming just over two months before January’s presidential election. But beyond that, how many of the 63 per cent of Nigerians living in extreme poverty would receive the money, and why only for 90 days? Too late, too little!
A UN General Assembly resolution urges countries to ensure their policies promote their citizens’ wellbeing. Many are doing so. For instance, the Financial Times recently reported that countries around the world are introducing fuel subsidies to shield households and businesses from the worsening energy crisis. But in Nigeria, President Tinubu removed the fuel subsidy and massively devalued the naira without mitigation, triggering a debilitating cost-of-living crisis. Now, however, with an eye on electoral fortunes, Tinubu is offering pre-election sweeteners, timed to end if he is re-elected. Where’s the social contract in Nigeria?
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