- Painful reforms in low income economy
- FX reforms brought more transparency
- Lagos–Calabar Coastal Highway a flagship project
- Structural transition, not stability yet
What began as a political gamble on May 29, 2023, quickly became a moment of economic shock therapy. President Bola Ahmed Tinubu’s announcement ending Nigeria’s fuel subsidy immediately reshaped price expectations, sending petrol and transport costs higher and triggering the first wave of sweeping economic adjustments.
Three years later, that decision and a chain of reforms that followed it, remains the defining axis of Nigeria’s economic debate. For the Tinubu administration, it is a story of fiscal repair, improved investor confidence, rising revenues and structural correction. For millions of households and businesses, it is a lived reality of higher prices, tighter incomes and prolonged adjustment stress.
As Nigeria marks the third anniversary of the administration, the central question dominating economic discourse is no longer whether reforms were necessary, but whether the gains are beginning to be outweighed by the social costs—, and whether the economy is finally stabilising or merely recalibrating under strain.
Across policy circles, academia and markets, the verdict remains divided.
The Tinubu administration’s economic strategy has been anchored on three major pillars: removal of petrol subsidies, unification of the foreign exchange market, and tighter monetary-fiscal coordination supported by an end to Central Bank “Ways and Means” financing.
Together, these policies dismantled long-standing price controls and quasi-fiscal distortions that had shaped Nigeria’s economic architecture for decades.
Analysts estimate that subsidy removal alone freed between N4 trillion and N6 trillion annually, significantly altering the fiscal space available to the federal government.
At the same time, the discontinuation of the Central Bank of Nigeria’s overdraft financing mechanism removed a key source of liquidity expansion that had previously contributed to inflationary pressures.
For proponents of the reforms, these were necessary corrections to long-standing structural imbalances.
However, the immediate effect was a pass-through to consumer prices, transport costs and food inflation, setting off one of the most intense cost-of-living crises in recent years.
Macroeconomic indicators improve, but at a worrisome cost
Despite widespread economic strain, several macroeconomic indicators improved over the three-year period, with Nigeria’s GDP growth strengthening from 2.54 percent in Q3 2023 to 3.46 percent in Q4 2023, averaging 3.19 percent in 2024, rising further to 3.85 percent in 2025, and reaching 3.89 percent in Q1 2026.
Average quarterly growth between Q3 2023 and Q1 2026 stood at 3.46 percent, signalling a gradual expansion path.
External reserves also improved significantly, rising to about $49.26 billion as of May 25, 2026, compared to $35.09 billion in May 2023.
Revenue performance followed a similar trajectory. According to Zacch Adedeji, Nigeria Revenue Service chairman, monthly government revenue rose from N711 billion in May 2023 to over N3.635 trillion by September 2025, while Nigeria’s tax-to-GDP ratio improved to 13.5 per cent following tax reforms and enhanced collection systems.
The improvements are interpreted by proponents as evidence of strengthening fiscal capacity; however, the overall macroeconomic environment remains challenged by persistent inflationary pressures, increasing debt levels, and ongoing cost-of-living constraints.
Economic experts remain split over the impact of the reforms, with some highlighting structural gains and others warning about the deepening social cost.
Uche Uwaleke, professor of capital market at Nasarawa State University, Keffi, argued that the administration inherited deep structural distortions that required difficult policy corrections.
“When President Tinubu assumed office in May 2023, Nigeria’s economy was weighed down by multiple crises,” Uwaleke said in a commentary assessing the administration’s performance.
He noted that subsidy removal and foreign exchange unification were the most consequential reforms undertaken by the administration.
According to him, subsidy payments exceeding N4 trillion in 2022 had become fiscally unsustainable while also enabling inefficiencies and leakages.
Uwaleke explained that removing subsidies freed up fiscal space for infrastructure and social investment but also triggered sharp increases in transport and living costs.
He added that FX market unification reduced arbitrage and improved transparency, even if it initially resulted in naira depreciation.
Financial analyst Yusuf Ahmed also highlighted improved transparency in the foreign exchange system.
“There is more transparency in the FX market today compared to what existed before 2023. Investors prefer clarity even when the exchange rate is painful,” he said.
Bimbo Omipidan, a public affairs analyst, however, stressed the absence of adequate social cushioning mechanisms.
“You cannot implement painful reforms in a low-income economy without strong social protection systems,” he said.
He warned that the absence of effective safety nets amplified the hardship experienced by households during the transition phase.
Debt burden expands despite revenue gains
One of the most contentious aspects of the reform era has been the rapid rise in public debt.
According to the Debt Management Office (DMO), total public debt rose from N87.38 trillion (June 2023) to N159.28 trillion (December 2025)
External debt increased from $42.49 billion to $51.86 billion, while domestic debt rose from N59.1 trillion to N89.4 trillion within the same period.
Debt service obligations also rose, climbing from N7.79 trillion in 2023 to N16.26 trillion in 2025, with a quarterly peak of N4.86 trillion in Q4 2025. The fiscal deficit in 2024 widened to N13.51 trillion, pushing the deficit-to-GDP ratio beyond statutory thresholds.
Muda Yusuf, director and CEO of the Centre for the Promotion of Private Enterprise (CPPE), linked rising debt partly to the cessation of “Ways and Means” financing.
“One of the reasons is before he (Tinubu) came in, there was the option of printing money – ‘Ways and Means’. But the ‘Ways and Means’ was stopped. So, that also created a gap. And the revenue generation was not moving fast enough to fill that gap. I think that is one of the major reasons we have this aggressive borrowing,” Yusuf said.
He noted that while borrowing helped sustain fiscal operations, it also significantly increased debt service pressure on government finances.
Inflation, FX reforms and the cost of adjustment
Inflation remains one of the most persistent challenges in the post-reform economy.
Inflation, which stood at 22.41 percent in May 2023, peaked above 30 percent during the early phase of reforms before moderating to 15.68 percent as of April 2026.
The Monetary Policy Rate has, however, risen to 27.5 percent, reflecting sustained monetary tightening by the Central Bank of Nigeria.
Foreign exchange reforms, including the unification of multiple exchange windows, led to significant naira depreciation, with the currency crossing N1,800/$1 during adjustment phases before stabilising around N1,400/$1 in the official market.
Financial analyst Yusuf Ahmed said FX reforms improved transparency.
“There is more transparency in the FX market today compared to what existed before 2023. Investors prefer clarity even when the exchange rate is painful,” he said.
Beyond macroeconomic stabilisation, the Bola Tinubu administration has pursued infrastructure expansion and capital market development as key pillars of long-term growth.
The Lagos–Calabar Coastal Highway remains a flagship project, with funding support including $1.2 billion from the UAE in December 2025 and an additional $747 million facility in July.
The Nigerian equities market has also experienced one of its strongest rallies in decades, with the All-Share Index rising by about 136 per cent since May 2023, climbing from 55,769 points to about 131,000 points.
Market capitalisation rose from N44 trillion in 2023 to nearly N160 trillion, reflecting investor optimism driven by reforms and banking sector recapitalisation.
Capital market analyst Sola Oni, CEO of Sofunix Investment and Communications, said the rally reflects improved investor sentiment but warned against over-reliance on market performance as a welfare indicator.
“Inflation, exchange-rate pressures and higher living costs have weakened consumer purchasing power and placed significant pressure on businesses, especially those that depend heavily on imports,” he said.
Investor confidence vs household pain
Justin Amase, policy research analyst at Presidential Economic Advisory Council, noted that reforms have restored investor confidence through improved FX liquidity and clearance of backlog obligations.
He said Nigeria’s external reserves rose from below $4 billion in 2023 to over $34 billion, while sovereign risk perception improved.
“The reforms have improved transparency and strengthened fiscal coordination, but the challenge now is translating macroeconomic gains into improved welfare for ordinary Nigerians,” Amase said.
He added that unemployment, debt servicing and weak purchasing power remain critical vulnerabilities.
Across board, analysts agree on the central point that Nigeria’s economy is undergoing structural transition, not yet structural stability.
Some indicators point to recovery including rising reserves, improved revenues, stronger capital inflows and a booming stock market. Others point to strain, consisting of rising debt, high interest rates, inflationary pressure and weakened consumer demand.
Uwaleke warned that the next phase of reform must prioritise productivity and job creation.
“Macro stability alone would not be sufficient if citizens continued to face poverty, unemployment and declining living standards. History may ultimately judge this administration not merely by the boldness of its reforms, but by whether those reforms succeed in building a more prosperous, inclusive and economically resilient Nigeria,” he stated.
As the Tinubu administration moves into its fourth year, the debate around Nigeria’s economic reforms is entering a new phase. The focus is no longer on the architecture of policy changes, but on their ability to translate into measurable gains across the wider economy.
Economists argue that the next test is knowing the extent to which consumers, businesses and financial markets can adjust to an economy that has undergone significant repricing following major reforms.
Ultimately, the durability of the programme will be determined by a narrow set of outcomes, showing whether inflation eases sustainably, employment expands, household purchasing power improves and public debt remains on a sustainable trajectory.
Until then, Nigeria remains caught between encouraging macroeconomic signals and the continuing strain felt by millions of households, a divergence that has become the defining feature of the reform era.
