Nigeria’s Painful Economic Reset: What the Numbers Say About Tinubu’s Reforms
Nigeria’s economic crisis did not begin with President Bola Ahmed Tinubu, but his administration made some of the most consequential economic policy changes in the country’s recent history. The removal of petrol subsidy and the liberalisation of the foreign-exchange market fundamentally changed the way Nigerians pay for fuel, transportation, electricity, imported goods and other essentials.
Whether those reforms were necessary is a legitimate economic debate. What is less debatable is that they came with enormous immediate costs for households and businesses.
1. The petrol subsidy was expensive and disproportionately benefited richer Nigerians
Nigeria’s subsidy regime consumed enormous public resources while providing unequal benefits. World Bank analysis found that poorer Nigerians received only a small share of petrol-subsidy benefits because wealthier households consume more petrol through cars and generators.
Tinubu announced the end of the subsidy on May 29, 2023. The reform subsequently generated substantial fiscal savings. Finance Minister Taiwo Oyedele said approximately ₦15.8 trillion in subsidy savings was mobilised for the Federation between June 2023 and December 2025, with ₦5.4 trillion accruing to the Federal Government and ₦10.4 trillion distributed to states and local governments.
But the existence of savings does not automatically mean Nigerians experienced an improvement in living standards. The same reform immediately transferred a large portion of fuel costs from government to consumers.
2. Foreign-exchange reform exposed the weakness of the naira
Nigeria previously operated with multiple exchange-rate windows, creating opportunities for arbitrage and preferential access to foreign currency. The CBN moved toward a unified, market-driven system in June 2023.
The naira subsequently depreciated sharply. While supporters describe this as the currency finding a more realistic market value, the consequences were severe: imported fuel, machinery, medicines, vehicles, industrial inputs and other dollar-dependent goods became considerably more expensive.
It is therefore inaccurate to attribute every subsequent price increase solely to “market reality.” Exchange-rate reform was one major factor among inflation, supply constraints, global commodity prices, monetary conditions and domestic production costs.
3. Passport fees increased substantially
Nigeria’s passport fees have also risen. The Nigeria Immigration Service announced new domestic fees of ₦100,000 for a 32-page, five-year passport and ₦200,000 for a 64-page, 10-year passport from September 2025. Diaspora fees remained denominated in dollars.
The government has justified the changes partly on the basis of modernising passport production and expanding centralised processing capacity. However, claims about eliminating all extortion or guaranteeing every applicant a passport within a particular number of days should be treated separately from the officially established fee increases.
4. Electricity reform shifted more of the cost toward consumers
The electricity sector has suffered from chronic underinvestment, liquidity problems and subsidy obligations. The 2024 Band A tariff adjustment was designed to move tariffs closer to cost-reflective levels while linking the highest tariff category to minimum service standards.
The policy was controversial because customers faced significantly higher electricity bills. Yet the underlying problem predates the current administration: Nigeria's power sector has struggled for years with inadequate generation, transmission constraints, distribution losses and insufficient investment.
5. The weaker naira has made many products dramatically more expensive
Cars, machinery, laboratory equipment and numerous industrial inputs are exposed to exchange-rate movements because Nigeria remains heavily dependent on imports.
Consequently, a vehicle that previously cost a few million naira can now cost many times more without the manufacturer necessarily increasing its dollar price by the same proportion.
The same principle affects cooking gas and other energy products, although domestic supply, transportation, international prices and exchange rates all influence LPG prices.
6. Government revenues have increased—but so has the burden on households
FAAC distributions have reached levels previously uncommon in Nigeria. For example, the Federal Ministry of Finance reported that ₦2.036 trillion was shared among the three tiers of government in April 2026, from ₦2.364 trillion in gross revenue.
Higher government revenue can create fiscal space for infrastructure and social programmes. But revenue growth alone does not prove that ordinary Nigerians are better off. The crucial question is how effectively those additional resources are converted into jobs, healthcare, education, infrastructure and lower living costs.
7. There are genuine social interventions
The government has introduced programmes including the Nigerian Education Loan Fund and the Presidential CNG Initiative.
NELFUND has expanded access to student financing, while the CNG programme has sought to reduce transportation costs by encouraging conversion from petrol and diesel to compressed natural gas.
The reported benefits are real in some locations, but they should not automatically be generalised to every Nigerian. Access, geographical coverage and affordability remain important considerations.
8. Inflation has finally begun to ease
Nigeria’s inflation crisis intensified after the reforms. Headline inflation reached 34.19% in June 2024 under the old CPI series. By August 2026, NBS reported headline inflation at 15.39%, before it fell further to 14.63% in September 2026.
However, lower inflation does not mean prices have returned to their pre-2023 levels. It means prices are increasing more slowly. Food inflation remained particularly high at 19.59% in September 2026, demonstrating why many households continue to feel significant economic pressure.
9. The real verdict remains complicated
Nigeria’s economy has shown signs of stabilisation and stronger growth. NBS reported real GDP growth of 3.89% year-on-year in Q1 2026, while the World Bank’s latest assessment put first-half 2026 growth at about 4.2%.
But economic stabilisation and improved living standards are not the same thing.
Tinubu’s reforms have addressed some longstanding structural weaknesses, particularly subsidy costs and the fragmented foreign-exchange system. At the same time, those reforms produced substantial short-term hardship, and millions of Nigerians continue to struggle with food, transportation, housing, electricity and healthcare costs.
The honest conclusion is therefore neither that “Tinubu caused Nigeria’s problems” nor that “Tinubu’s reforms solved Nigeria.”
Nigeria is undergoing a painful economic reset. The real test is whether the additional revenue, improved fiscal position and greater macroeconomic stability eventually translate into something ordinary Nigerians can actually feel: cheaper food, reliable electricity, productive jobs, affordable transport, stronger purchasing power and a meaningful reduction in poverty.
That is where the success or failure of the reforms will ultimately be judged—not by political slogans, but by the living conditions of Nigerians.
0 Comments