By Adefolarin A. Olamilekan
Since assuming office on May 29, 2023, President Bola Ahmed Tinubu has pursued an ambitious economic reform agenda aimed at restructuring Nigeria’s economy for long-term growth and resilience. Central to these reforms are the removal of the fuel subsidy and the unification of Nigeria’s multiple exchange rates—two decisions that have generated considerable debate and visible consequences across the country.
President Tinubu’s policy direction emphasizes economic liberalization, reduced government interference, and strengthened private-sector participation. His administration has also embarked on tax reforms and raised import tariffs by adjusting the official exchange rate used by the Central Bank of Nigeria (CBN) for customs calculations.
Foreign Exchange Reforms and Their Effects
The unification of the naira’s exchange rates was intended to curb arbitrage opportunities, stabilize the currency, and attract foreign investment. However, the reality has been far more complex. The floating of the naira has led to rapid depreciation, placing additional pressure on import-dependent sectors and fueling inflation.
Subsidy Removal and the Cost of Living
The scrapping of the petroleum subsidy, announced on President Tinubu’s first day in office, was designed to free up government revenue and reduce fiscal leakages. However, the removal has driven up energy costs, exacerbating the already high cost of living and contributing to a sharp increase in food prices. Disposable incomes have shrunk, and poverty levels have continued to rise.
While the President and his economic team have acknowledged these immediate hardships, they argue that the structural challenges facing Nigeria’s economy demand bold and often painful corrective measures. Supporters of the reforms insist that previous governments failed to act decisively, leaving Tinubu with no alternative but to initiate deep economic restructuring.
Public Response and Protests
Despite assurances from the Presidency about the long-term benefits of these reforms, public dissatisfaction remains widespread. The past several months have witnessed waves of protests across the country, organized under various banners, calling for urgent interventions to address the deteriorating economic conditions.
Yet, analysts argue that the government is prioritizing economic pragmatism over political expediency. For decades, Nigeria’s economy has operated under unsustainable models, and some contend that the country has now reached a turning point where difficult reforms are inevitable.
Historical Parallels and Local Realities
Comparisons have been drawn between Tinubu’s reforms and those of past global leaders such as Margaret Thatcher in the UK, Deng Xiaoping in China, and Boris Yeltsin in post-Soviet Russia—leaders who implemented controversial reforms that initially triggered public discomfort but ultimately transformed their nations’ economies.
Still, Nigeria’s unique socio-political landscape sets it apart. The reforms must navigate a fragile economy, institutional weaknesses, and widespread poverty—factors that complicate direct comparisons and demand nuanced implementation strategies.
Looking Ahead: Midterm Review
As the Tinubu administration approaches the midpoint of its term, questions persist about the efficacy and impact of its economic agenda:
- How significant are the reforms to Nigeria’s long-term economic stability?
- Are the policies yielding measurable results?
- Can they ultimately stimulate economic development comparable to the global examples cited?
- Most importantly, are Nigerians beginning to see tangible benefits?
The answers to these questions may define the legacy of President Tinubu’s economic leadership. But for now, many Nigerians continue to wait—hopeful, skeptical, and enduring the toll of a transition that promises eventual progress, but demands present-day sacrifice.
