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.
However, they have also triggered widespread economic hardship, including sharp increases in fuel and transport costs (which accelerated inflation) and a decline in real incomes, especially for low- and middle-income households.
To cushion these side effects, the government introduced a range of mitigation programmes. Yet, the core challenge is not the absence of interventions but their limited visibility, weak coordination, and insufficient impact. Many Nigerians continue to bear the costs of reform without feeling the benefits.
This paper argues that Nigeria must move from a fragmented, short-term palliative approach to a coherent, structured, and transparent national mitigation strategy. The central proposal is the creation of a national reinvestment framework that explicitly links reform savings to visible public outcomes. This can be achieved through a ring-fenced fund with political coordination at the highest level and buy-in of critical stakeholders. Such an approach would strengthen accountability, improve programme delivery, and rebuild public trust in the reform process while moving Nigeria’s mitigation strategy from a reactive approach to a framework that is pro-active, robust and enduring.
Current Reform Landscape and Mitigation Challenges
Since the implementation of the 2023 reforms, the Federation has experienced a significant windfall in revenues. In 2024 alone, the Federation Account Allocation Committee (FAAC) disbursed an unprecedented N28.78 trillion to the three tiers of government, representing a staggering 79% increase from the previous year, with state governments seeing a 45.5% surge in their statutory allocations[1]. Yet, this massive injection of liquidity has not translated into visible improvements in the standard of living of the average Nigerian.
The Federal Government has deployed a mix of mitigation programmes aimed at easing economic pressure. These include conditional cash transfers targeting vulnerable households, food and grain distribution through state governments, wage awards and negotiations with organised labour, the Presidential Compressed Natural Gas (CNG) Initiative to reduce transportation costs, and the Nigerian Education Loan Fund (NELFUND) to expand access to tertiary education.[2][3][4]Despite their breadth, these programmes face significant structural challenges that limit their effectiveness.
The first challenge is weak visibility and a lack of a coherent reform narrative. While citizens directly experience the negative effects of reform—higher fuel prices, increased transport fares, and rising food costs—the benefits of mitigation programmes are often unclear or unevenly distributed. Many interventions are not explicitly communicated as outcomes of subsidy savings, and there is no consistent effort to demonstrate how reform-generated revenues are being reinvested. This gap fuels public scepticism and weakens support for reform.
The second challenge stems from Nigeria’s federal structure. The removal of the subsidy has led to a substantial increase in revenues distributed through the Federation Account, significantly boosting allocations to states and local governments. However, these additional resources are not tied to specific mitigation outcomes. In the absence of clear guidelines or accountability mechanisms, much of this fiscal expansion is absorbed into annual budgets or used in ways that are not visible to citizens. As a result, the potential for subnational governments to act, or be seen to act, as key drivers of mitigation has not been fully realised.
The third challenge is the absence of a robust monitoring and evaluation framework. There is currently no integrated system that tracks the design, implementation, and impact of reform mitigation programmes across the country. For example, cash transfer programmes have faced credibility issues due to disputes over the accuracy of social registers and beneficiary identification. Similarly, food distribution and wage interventions lack standardised reporting mechanisms. Without reliable data and transparent reporting, it is difficult to measure outcomes, identify gaps, or build public confidence.
A fourth, often overlooked issue, is programme fragmentation and a lack of continuity. Many mitigation efforts operate independently, without coordination or strategic alignment. This reduces efficiency, leads to duplication, and limits the potential for cumulative impact. In effect, Nigeria’s mitigation landscape remains reactive rather than strategic.
Lessons from Past Reform Mitigation Programmes
It is important to note that this is not Nigeria’s first experience in dealing with post-reform, especially post-subsidy, mitigation programmes. Nigeria’s past reform-related interventions provide important lessons for the present. Two prominent examples immediately come to mind: the Petroleum Trust Fund (PTF) and the Subsidy Reinvestment and Empowerment Programme (SURE-P). They both illustrate the opportunities and risks associated with mitigation programmes.
The PTF, established in 1994 by the military administration of General Sani Abacha, was chaired by former Head of State Major General Muhammadu Buhari (who later became a civilian president from 2015 to 2023). PTF was conceived explicitly as an interventionist development agency designed to pacify profound public outrage following a sharp upward adjustment in petroleum prices.[5] Decree No. 25 of 1994 (as amended by Decree No. 1 of 1995), which established the PTF, specified seven areas for intervention by the fund. These areas were roads, road transport and waterways, health, education, water supply, food supply, security services, and other projects.
During the inauguration of the board of PTF, the then head of state Gen. Sani Abacha, declared: “Over the years, a fundamental element of distrust in public accountability has embedded itself in the psyche of the Nigerian people like a cankerworm. Repeatedly disappointed by the extravagant promises and unfulfilled expectation, Nigerians became cynical about government and the public morality of its agents and agencies.”
This highlighted the role of public trust as a key driver of PTF's creation. Its stated mission also goes ahead to restate its commitment to social protection: “...to establish and operate an open, modest and effective organisation for the purpose of achieving efficient, honest and timely execution of carefully designed socio-economic projects, spelt out or implied by the enabling Decree but carefully prioritised to enhance the general condition of living for all Nigerians in the shortest period of time possible.”
By January 1998, a total of N132 billion[6] (about $6 billion at the time) had been disbursed to PTF. Over the years, allegations of nepotism and corruption were levelled against the programme. Still, it's hard to argue that PTF was not effective in delivering visible infrastructure and social interventions, particularly in health, education, and transport. Its strong, consistent branding made its activities highly visible, with projects executed under it clearly identified, which gave it public visibility and reinforced the connection between government action and public benefit. This does not mean the programme was perfect or without concerns, but it provides a lesson for today. The programme actively sought to earn public trust and ensured that the projects carried out were tied to the purpose of its establishment. Yet, its establishment also hints at the nature of Nigeria’s social protection strategy, which is more reactive than proactive. PTF didn't make it past the return to democracy, and the fact that no serious attempt was made to replace it further reinforces this point.
SURE-P, introduced in 2012, recorded measurable achievements in employment generation, healthcare delivery, and infrastructure development. Programmes such as the Graduate Internship Scheme and maternal health initiatives had tangible impacts. However, SURE-P ultimately failed to gain lasting public trust. It suffered from overextension across too many sectors, weak transparency, and allegations of politicisation. Critically, it lacked a clear communication strategy, meaning that many citizens were unaware of its achievements or did not associate them with subsidy savings.[7]
An impact assessment study on SURE-P revealed that approximately 10.35% f surveyed citizens explicitly attributed the programme's perceived failure to systemic corruption, embezzlement, and the overt politicisation of employment slots, where political elites and their cronies hijacked benefits intended for the vulnerable. Notably, high-ranking officials in subsequent administrations admitted a total lack of awareness regarding specific projects funded by SURE-P. Furthermore, core promises used to justify the 2012 subsidy removal—most notably the pledge to construct three greenfield refineries in Lagos, Kogi, and Bayelsa to ensure domestic supply security never materialised. [8]
Both PTF and SURE-P clearly demonstrate previous attempts at creating mitigation programmes with varying degrees of success. It is hard to escape that both of them were casualties of the political process, and they further reinforces the reactive approach usually taken towards social protection. These experiences highlight recurring lessons: mitigation programmes must be focused, transparent, well-coordinated, and highly visible. Without these elements, even well-funded initiatives can fail to achieve legitimacy.
Policy Recommendations
To address the identified challenges, Nigeria must adopt a more structured and strategic approach to mitigation.
First, the government should establish a National Reform Mitigation Framework that clearly defines objectives, aligns interventions across sectors and tiers of government, and provides a unified narrative linking reform costs to public benefits. This framework should prioritise key outcomes such as reducing cost-of-living pressures, protecting vulnerable populations, and investing in long-term economic resilience.
Second, a ring-fenced reinvestment mechanism of part of the savings should be created within the Nigeria Sovereign Investment Authority. Why the NSIA? Because it already has legislation that allows it to invest funds for the rainy day. While a new body could be created, the creation of a new body may open it up to litigation in the future. This fund should receive a defined portion of extra revenues generated through the reforms.
Thirdly, some of the savings should be channelled into high-impact infrastructure and social programmes such as mass transit systems, energy access projects, and healthcare facilities, the government can ensure that reform savings translate into visible and tangible benefits. Such should be designed and managed by a central administrative structure in the mould of PTF or SURE-P but with adequate measures put in place measures to avoid their mistakes and challenges. The National Economic Council should be leveraged to build political consensus and provide political oversight. Through the NEC, federal and state governments can agree on a “National Priority Projects” framework that ensures equitable distribution of investments across states. This approach allows states to retain ownership while benefiting from centralised financing and execution capacity. It also helps align incentives and reduce fragmentation.
Fourthly, monitoring and evaluation systems must be significantly strengthened. The government should develop a unified digital platform that tracks all mitigation programmes, including funding flows, beneficiary data, and project progress. This platform should be publicly accessible, enabling citizens, civil society, and policymakers to monitor performance in real time. Communication and visibility must be treated as core components of the process. All mitigation programmes should be clearly branded as reform dividends, with consistent messaging across channels. Infrastructure projects, social programmes, and financial transfers should be visibly linked to reform savings. This will help establish a direct and credible connection between the sacrifices citizens are making and the benefits they receive.
Finally, the government should prioritise a limited number of high-impact interventions rather than dispersing resources across numerous small programmes. Focusing on areas such as transport, food security, and targeted income support will ensure that mitigation efforts are both effective and visible.
Conclusion
The key reforms implemented in Nigeria since 2023 have created a critical opportunity to reset the trajectory of the country’s economy. However, their long-term success depends on the government’s ability to manage the social consequences and maintain public trust.
While existing mitigation programmes demonstrate an important commitment to cushioning the impact of the reforms, they remain constrained by weak visibility, fragmented design, and limited accountability. Lessons from past initiatives such as PTF and SURE-P highlight the importance of coherence, credibility, transparency, and communication.
By adopting a more structured approach, anchored in a national framework, supported by institutional mechanisms with clear political buy-in and oversight, Nigeria can transform its mitigation efforts into a credible and effective system of reform dividends. Ultimately, the sustainability of these reforms will depend on one key factor: whether citizens can clearly see and feel the benefits. Making those benefits visible, tangible, and accountable is the foundation for lasting economic transformation.
[1] https://guardian.ng/news/despite-n7tr-subsidy-savings-states-fail-to-cushion-hardship-hunger/
[2] https://www.channelstv.com/2023/07/20/subsidy-removal-nec-decides-on-palliative-measures-for-nigerians/
[3] https://statehouse.gov.ng/president-tinubu-approves-establishment-of-presidential-cng-initiative-targets-nationwide-adoption-of-workshops-for-smooth-transition-to-cng-fuelled-vehicles/
[5] https://journals.ufs.ac.za/index.php/as/article/download/1994/1962/3844
[6] https://journals.ufs.ac.za/index.php/as/article/download/1994/1962/3844
[7] https://aksujacog.org.ng/publications/the-subsidy-re-investment-and-empowerment-programme-sure-p-as-a-palliative-policy-in-nigeria-an-impact-assessment/the-subsidy-re-investment-and-empowerment-programme-sure-p-as-a-palliative-policy.pdf
[8] https://aksujacog.org.ng/publications/the-subsidy-re-investment-and-empowerment-programme-sure-p-as-a-palliative-policy-in-nigeria-an-impact-assessment/the-subsidy-re-investment-and-empowerment-programme-sure-p-as-a-palliative-policy.pdf
