By Franklin Iyamah | President Bola Tinubu opened the first day of his tenure by delivering one of Nigeria's most consequential fiscal reforms in decades: the excision of the petrol subsidy scheme.

Recent progress on food prices should not distract Nigerian policymakers from the hard work of sustainably addressing the country’s longstanding challenge with food security, a challenge exacerbated by the administration’s fiscal and monetary reforms 

By Adedayo Bakare | All reforms are painful and inconvenient but macroeconomic reforms can be particularly devastating. Since the inauguration of President Bola Tinubu in May 2023, Nigeria has moved from reluctance to urgency in macroeconomic reforms.

Remi Aiyede | Nigeria stands at a critical juncture. The economic reforms currently underway, initiated at the dawn of the current administration, were born from a necessity that few can deny. For decades, the country’s economy operated under a fragile illusion of stability, propped up by a costly petrol subsidy that bled public finances and an artificially fixed exchange rate that enriched rent-seekers while stifling investment. When President Bola Tinubu announced during his inauguration that “subsidy is gone,” it signalled a definitive break from the past. This bold move, coupled with the devaluation of the Naira, was intended to chart a path toward fiscal sanity and long-term prosperity.

Yet, as the dust settles, it has become painfully clear that the road to economic salvation cannot be paved with good intentions alone. The initial announcement sent immediate ripples across the petroleum sector. Petrol pump prices skyrocketed overnight. The devaluation of the Naira barely two weeks after compounded the crisis, acting as a one-two punch to most citizens. The result was a perfect storm: inflation surged, the purchasing power of ordinary Nigerians evaporated, and millions were pushed further into poverty. The resultant cost-of-living crisis naturally erupted into public outcry. While the government later introduced palliatives, social investment programmes and cash transfers meant to soften the blow, the damage to public trust had already been done. The “harm” was not merely economic. It was a fracture in the social contract, casting a long shadow over the very reforms meant to secure the nation’s future.

At the heart of the controversy surrounding these reforms lies a critical issue: sequencing. While the necessity of reform is rarely disputed, the order, timing, and coordination of policy measures have been the subject of intense debate. Economic theory often assumes ideal conditions, rational actors, efficient markets, and well-functioning institutions. Nigeria’s socio-economic landscape is far more complex, shaped by insecurity, infrastructural deficits, and deep inequalities. By implementing multiple high-impact reforms simultaneously, policymakers exposed an already vulnerable population to compounded shocks. A more humane approach, one that prioritises dialogue, accountability, and strategic communication, might have differentiated between the inevitable winners and losers of such a tectonic shift. Instead, the abruptness of the changes created a vacuum quickly filled by speculators and saboteurs, individuals who exploit volatility for personal gain. This further alienated the citizenry from the government’s objectives.

Reform, particularly of this magnitude, cannot succeed without public understanding and support. Yet the government’s engagement strategy has largely fallen short. Citizens have been told what is happening, but not sufficiently why it is necessary or how it will benefit them in tangible terms. This communication gap has created fertile ground for misinformation, speculation, and opportunistic behaviour. In the absence of clear and consistent messaging, some market actors have exploited uncertainty, exacerbated price volatility and deepened public anxiety. Effective reform requires more than policy announcements. It demands sustained dialogue, transparency, and a willingness to listen as well as to explain.

To restore credibility and sustain momentum, the government must shift from a narrow focus on implementation to a broader strategy of mobilisation. Public buy-in is not automatic. It must be actively cultivated. This involves not only articulating the long-term vision of reform but also demonstrating, in concrete ways, that progress is being made. Transparent reporting on fiscal savings, investment allocations, and developmental outcomes can help bridge the trust deficit. Citizens need to see evidence that the sacrifices they are making are yielding results, whether in improved infrastructure, better public services, or enhanced economic opportunities. Citizens need to understand not just the what and the how, but the why. This requires a level of transparency that has so far been lacking. It demands that the government should design robust mechanisms for monitoring progress and sharing data. Accountability must be built into the framework from the ground up.

Beyond technical adjustments, there is a need to reimagine governance as a more inclusive and participatory process. Citizen engagement should not be an afterthought but a central pillar of reform. This can take multiple forms: regular town hall meetings, public consultations on major policy decisions, and the strategic use of digital platforms to gather feedback and disseminate information. Universities, research institutions, and civil society organisations also have a critical role to play in providing evidence-based analysis and facilitating dialogue. By incorporating diverse perspectives into the policymaking process, the government can design reforms that are not only economically sound but also socially responsive.

A particularly urgent area for improvement is the design and management of social protection programmes. The palliatives introduced to mitigate the impact of reforms should not be treated as temporary add-ons but as integral components of the reform strategy. Ideally, these measures should have been established and fully operational before the removal of subsidies and the liberalisation of the exchange rate. Going forward, these measures must be strengthened through better targeting, rigorous monitoring, and continuous updating. A dynamic and credible social register is essential to ensure that assistance reaches those who need it most. Moreover, mechanisms must be put in place to prevent leakages and political capture, especially when funds are disbursed through multiple layers of government. Without robust oversight, these programmes risk reinforcing public cynicism rather than alleviating hardship.

Ultimately, the sustainability of Nigeria’s economic reforms will depend on their legitimacy in the eyes of the people. Citizens are being asked to endure significant short-term pain in exchange for the promise of long-term gain. This is a difficult proposition under any circumstances, but especially so in a context where trust in public institutions is already fragile. To maintain public support, the government must demonstrate that the burdens of adjustment are being shared fairly and that the benefits are not being captured by a privileged few. Equity, transparency, and accountability must therefore be at the core of the reform agenda.

Nigeria’s current trajectory underscores a fundamental truth: sound policies alone are not enough. The success or failure of reform ultimately hinges on the process by which it is implemented and the extent to which it resonates with the lived realities of citizens. Shock therapy may achieve rapid change, but it often does so at a high social and political cost. A more inclusive approach—one that balances urgency with empathy and technical rigour with democratic engagement—offers a more sustainable path forward.

Nigeria’s reforms are necessary, but they do not have to be brutal. The stakes could not be higher. Nigeria’s economic future depends not only on correcting past distortions but also on building a new foundation of trust between the state and its people. This requires a commitment to dialogue, a willingness to adapt, and a recognition that reform is as much a political and social process as it is an economic one. The window for recalibration is still open, but it is narrowing. If the government can align its policies with the needs and expectations of its citizens, these reforms may yet achieve their transformative potential. If not, they risk becoming another chapter in a long history of well-intentioned but ultimately unsuccessful interventions.

*Aiyede is a professor of political institutions, governance and public policy at the University of Ibadan and an extraordinary professor at the University of Pretoria.

By Adebayo Ahmed | Prior to the transition in government in 2023, Nigeria's economic conditions were deteriorating significantly. Inflation increased from approximately 10% at the beginning of 2012 to over 21% by the end of 2022^[1], accompanied by considerable volatility throughout the period. Concurrently, real median incomes were in decline. The World Bank estimates that GDP per capita in 2023, adjusted for purchasing power parity, was lower than it was a decade earlier in 2013^[2], as shown in Figure 1 below. These indicators were compounded by recurrent fuel shortages, foreign exchange rationing, and additional economic shocks. According to the Food and Agriculture Organisation, the proportion of the population experiencing moderate or severe food insecurity increased from 34.7% in 2015 to 73.9% in 2022. Collectively, these factors placed substantial pressure on the average Nigerian household. Public sentiment surveys corroborate this assessment. Afrobarometer data, as shown in Figure 2, indicated that 88.7% of Nigerians believed the economy was moving in the wrong direction in 2022, a figure that increased to 92.8% by 2024.

Fig 1: GDP per Capita (Purchasing Power Parity) in Constant 2021 USD. Source: World Bank

Fig 2: Percent who believe economy moving in the wrong direction. Source: Afrobarometer

The severity of economic conditions, particularly regarding petrol subsidies and exchange rate management, generated broad consensus among all the major presidential candidates on the necessity of reform. The President Bola Tinubu administration proceeded with implementing several of these recommended reforms. While implementation details remain subject to retrospective evaluation, there is near-unanimous agreement that reforms concerning the exchange rate and petrol subsidies have been largely successful. The Nigerian macroeconomy currently demonstrates greater stability. Petrol subsidies, which previously constituted a significant drain on public finances, have been substantially eliminated, and following initial volatility, the exchange rate has stabilised. Certain segments of the population have benefited from the reforms as well, but these have mostly been the big business and the institutional investors—the mostly wealthier part of the population.

Fig 3: Percent of Population living in Poverty. Source: National Bureau of Statistics - National Living Standards Survey, World Bank Estimates.

However, these reforms imposed considerable costs on ordinary citizens, the majority of whom have not yet fully recovered or realised tangible benefits. The prevailing reality remains that most Nigerians are economically worse off than prior to the reforms, and living standards have not improved meaningfully for the majority. According to the National Bureau of Statistics (NBS), the number of individuals living in poverty increased from 40 million to 56 million between 2019 and 2023, with further increases likely following the implementation of economic reforms. Inflation reached 34.8% in 2024 and, while moderating, remains elevated relative to pre-pandemic levels in 2019. Although the macroeconomy has been stabilised, the welfare of ordinary Nigerians remains at historically poor levels.

The central policy question is therefore: what measures should be pursued next? Given that additional reforms are necessary to generate meaningful improvements in living standards, how can policymakers ensure that hard-won macroeconomic gains are preserved while simultaneously delivering tangible benefits to Nigerians?

Addressing this question is critical, as public tolerance for the status quo cannot be assumed indefinitely. As evidenced by security challenges across multiple regions, diminished public confidence has contributed to instability threatening national cohesion. Furthermore, as demonstrated during the post-COVID-19 recovery period, deterioration can occur rapidly. Importantly, with another election cycle approaching, various political actors may advocate for a return to pre-reform arrangements, specifically fuel subsidies and foreign exchange rationing, under the pretext of protecting vulnerable populations.

Strategic Policy Responses

The ideal policy response towards ensuring the general population continues the support for the reforms can be structured around two strategic dimensions: (1) immediate measures to alleviate suffering, particularly among the most vulnerable, and (2) medium-to-long-term structural interventions.

Immediate Action 1: Social Transfer Programmes

Direct financial transfers to Nigerians represent a priority intervention. This component was intended to form part of the 2023 reform package, with the rationale that eliminating fuel subsidies and liberalising foreign exchange markets would generate fiscal space for redistribution to vulnerable populations. While fuel subsidies were removed and foreign exchange markets liberalised, the social transfer component of the reforms has been ineffective. As of February 2026, the Federal Government reported that nine million households received some form of social transfer, though implementation details remain unavailable. One-time transfers of ₦25,000 are unlikely to constitute meaningful support.

What is required is a systematic, institutionally-funded social transfer programme. A viable approach would involve allocating a percentage of resource revenue inflows directly to citizens. Instituting a first-line charge on a specified percentage of federation inflows from crude oil and other natural resources, distributed as direct social transfers, would accomplish multiple objectives: (1) providing immediate benefits from reforms to the population, (2) creating public stakeholder interest in reform sustainability, and (3) establishing an automatic buffer against fluctuations in Nigeria's resource export prices, as currently observed with crude oil price increases driven by geopolitical tensions involving the United States, Israel, and Iran.

Immediate Action 2: Cost Reduction Measures

Citizen welfare depends not only on disposable income but also on the overall cost of living. The government has taken positive steps to reduce food prices through trade liberalisation and credible monetary policy, evidenced by food inflation declining from approximately 40% annually in 2024 to roughly 12% currently. Additional efforts beyond trade and monetary policy are warranted, particularly regarding food and transport, the two categories comprising the majority of Nigerian household expenditure.

Fig 4: Percent difference between maximum and minimum food price – January 2026. Source: National Bureau of Statistics

One potential immediate option is to focus on the internal logistical challenges which significantly constrain the free movement of goods, resulting in substantial price variations across states. For instance, according to the NBS, in January 2026, yam prices in Delta State exceeded those in Niger State by more than 100%. Frozen chicken prices in Enugu State were nearly 100% higher than in Taraba State. Canned evaporated milk prices in Gombe State were approximately 50% higher than in Kano State. These disparities indicate serious internal logistics deficiencies with direct implications for cost of living. Addressing the logistical barriers generating such intra-national price variation constitutes an immediate priority for reducing living costs.

Medium-to-Long-Term Strategic Planning

Immediate interventions to increase household income and reduce living costs will provide direct relief and enhance short-term reform sustainability. However, medium-to-long-term reform sustainability depends on the government's capacity to articulate a credible pathway to improved living standards that convinces citizens to endure interim hardships.

Currently, no comprehensive national development strategy exists. Vague aspirations of achieving a $1 trillion economy by 2030 lack credibility and relevance for most citizens. Nigeria's nominal GDP was approximately $250 billion in 2024, a statistic with limited meaning for the 60% of Nigerians living in poverty. Similarly, achieving a $1 trillion economy while 70% of the population remains in poverty would not constitute an agenda capable of generating public support.

A more appropriate objective would be an agenda for elevating the average Nigerian to middle-income status by 2050. This would require median annual income growth of approximately 4%, increasing from the estimated $1,663 in 2023 to approximately $5,000. This target is both achievable and credible. Importantly, focusing on median income provides a more meaningful and relatable metric than an arbitrary aggregate GDP target.

What reforms would be needed to attain this median income status of $5,000 a year? It is useful to think about what an economy with a $5,000 a year median income would need to look like. This economy would likely need people to be reasonably educated with relevant skills. You would therefore need a measurable and actionable plan for education. This economy would need people to be healthy and have access to healthcare as that is one of the primary reasons why incomes get decimated. You would therefore need a similar plan for healthcare. You can estimate that half the population in 2050 are likely to be women. If you want the median Nigerian income to be at middle income status, then you would need to at least have the median income for women to also get to middle income status. You would therefore need a plan for issues relating to women targeting the things that limit their income growth, such as the costs of unpaid care work or social norms around participation in the labour market.

It is also clear that the most sustainable path to increasing median incomes is to have sustainable decent job growth that is large enough for the size of Nigeria’s population and for the number of people entering the labour market each year including those who are unemployed or underemployed. Pre-pandemic data from the NBS estimated that about four to five million individuals entered the labour market annually. Thus, a plan for sustainable job growth at the scale that is required would be needed. It is also known that historically, labour-intensive manufacturing sectors that focus on exporting to global markets have been a sustainable engine of job growth in many countries. A plan to engineer growth in labour-intensive manufacturing sectors would therefore be needed.

Supporting this labour-intensive manufacturing growth of the scale that is required would need good infrastructure and access to stable and reliable electricity. A plan for infrastructure and stable and reliable electricity would be needed. All this of course would need to be done within the context of keeping costs low. There are likely many other dimensions of planning that would be required but the rationale in each is the same.

Conclusion

Without articulating a feasible, measurable objective that resonates with Nigerians, the reform agenda faces significant risk of stalling. Nigerians may be inclined to prioritise immediate benefits even when these undermine longer-term potential. Convincing Nigerians to defer gratification and sustain commitment to the reform path requires a credible, measurable development framework that demonstrates clear, tangible, and believable pathways to improved living standards for the average person. 

[1] Source: National Bureau of Statistics – Consumer Price Index.

[2] World Bank: International Comparison Program (ICP) - https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2024&locations=NG&start=2011

By Samuel Ajayi | The economic reforms implemented in Nigeria since 2023, particularly the removal of petrol subsidy and exchange rate liberalisation, represent a necessary but disruptive shift toward macroeconomic stability. These reforms have corrected long-standing fiscal distortions, improved revenue flows, and created significant fiscal space across all tiers of government.