A country at a turning point, Nigeria stands once again at a crossroads. The government of President Bola Ahmed Tinubu has embarked on one of the boldest sets of economic reforms since the 1980s. Fuel subsidies — long considered untouchable — have been removed. Exchange rates — once a confusing maze of official, parallel, and “special window” markets — have been unified. Revenue mobilisation, power sector revival, and social protection measures have been placed at the centre of the government’s agenda.
Supporters argue these are overdue corrections to decades of economic distortions. Critics warn they may worsen hardship for millions already struggling to survive. The reality, as always, is more complex. The question Nigerians are asking is simple: Will these reforms work?
To answer, we must look at them through three lenses: effectiveness (can they stabilise the economy?), inclusiveness (do they protect ordinary Nigerians?), and sustainability (will they endure and create long-term prosperity?).
Effectiveness: Anchoring macroeconomic stability
For decades, fuel subsidies have been the elephant in Nigeria’s budget room. By 2022, they consumed more than N4 trillion annually — more than the combined federal allocations for health and education. Removing them freed up resources but instantly pushed up petrol prices and transportation costs.
The Tinubu administration also took on the long-standing problem of multiple exchange rates. For years, businesses, investors, and even ordinary travellers faced the absurd reality of paying vastly different rates depending on whether they were accessing “official” dollars, Bureau de Change rates, or the black market. The new policy unified these rates, signalling transparency and attracting foreign capital.
But effectiveness is not automatic. Inflation spiked after subsidy removal, hitting food and transport costs hardest. The naira, though officially unified, remains volatile because of limited foreign reserves and weak investor confidence.
Economists point out that effectiveness depends on sequencing: reforms must be rolled out with supporting measures — disciplined monetary policy, credible communication, and complementary fiscal actions. Without them, short-term gains may vanish, leaving Nigerians worse off.
Inclusiveness: Cushioning households and expanding Jobs
Economic reforms are not just about numbers; they are about people. And in a country where over 40 per cent of the population lives below the poverty line, inclusiveness is not a luxury, it is a necessity.
The government announced cash transfers, transport subsidies, and plans to support small businesses. But as many Nigerians know too well, the devil is in the delivery. Payment delays, weak targeting, and limited coverage have plagued these efforts. Rural households, women, and those in the informal economy often remain excluded from social safety nets.
Inclusiveness also means jobs. A reform package that only balances budgets but leaves millions unemployed will not hold politically. The savings from subsidies should flow into programmes that boost agriculture, agro-processing, small and medium enterprises (SMEs), and youth entrepreneurship. Done right, these can absorb Nigeria’s restless young population and generate inclusive growth.
Gender is another dimension. Women, who dominate the informal trade sector, are often hardest hit by inflation and least likely to benefit from government support. Without deliberate gender-sensitive interventions, reforms risk deepening rather than reducing inequality.
Sustainability: Beyond quick fixes
Perhaps the biggest question is whether the reforms can endure. Nigeria’s economic history is full of dramatic announcements that faded into half-measures. For Tinubu’s reforms to succeed, they must be sustainable — financially, socially, and politically.
Revenue mobilisation
Nigeria’s tax-to-GDP ratio is just 7 per cent, one of the lowest in Africa. Without improving tax collection, subsidy savings alone will not create a sustainable fiscal base. Expanding the tax net, digitising systems, and supporting state governments to raise their own revenues are all essential. But taxation must be fair: overtaxing small businesses or low-income households risks killing growth.
Power sector reform
Every Nigerian knows the frustration of an unreliable power supply. Despite privatisation, the sector still generates less than 5,000 MW for over 200 million people. This cripples industries, discourages investment, and keeps generators humming in neighbourhoods across the country. Reform here means fixing transmission lines, enforcing tariffs that cover costs while protecting the poor, and investing in renewables. Without stable electricity, talk of industrialisation will remain rhetoric.
Industrial diversification
For decades, oil has been both Nigeria’s blessing and its curse. Price booms bring windfalls, while crashes trigger crises. True sustainability requires building new pillars of growth: manufacturing hubs, agro-industrial chains, and a thriving tech sector. Special economic zones, export incentives, and digital innovation could all play a role in building a more resilient economy.
Human capital development
At the heart of sustainable growth lies human capital. Nigeria’s Human Capital Index remains among the lowest in the world, reflecting gaps in education, health, and social services. Reform dividends must translate into better schools, vocational training, and healthcare access. Without an educated and healthy population, reforms will collapse under the weight of weak productivity.
Institutional credibility
Finally, sustainability rests on institutions. Nigeria has seen too many reforms reversed by political expediency. Strong anti-corruption frameworks, judicial independence, and transparent fiscal management are the guardrails that keep reforms on track. Without them, even well-designed policies risk being undone.
A Reform Scorecard: Measuring what matters
One of the biggest challenges with reforms is accountability. Governments make promises; citizens feel pain; but how do we measure progress?
This article proposes a Reform Scorecard — a transparent, quarterly monitoring system that tracks progress on key indicators:
Effectiveness: inflation, exchange rate stability, fiscal deficit.
Inclusiveness: coverage of social safety nets, job creation, SME financing.
Sustainability: non-oil revenue share, electricity generation, human capital outcomes.
If published regularly and independently verified, such a scorecard would do three things: reassure citizens that progress is being tracked; give policymakers feedback on where to adjust; and build investor confidence in Nigeria’s seriousness.
Most importantly, it would make reforms about results — not rhetoric.
The road ahead: Opportunity or another missed chance?
Tinubu’s reform agenda is a high-risk, high-reward gamble. On the one hand, it addresses problems that Nigerians have known for decades — wasteful subsidies, distorted exchange rates, weak revenues, unreliable power. On the other hand, the pain of adjustment is real, and without cushioning, it may provoke resistance.
The path forward requires balancing effectiveness with compassion, discipline with flexibility, and urgency with credibility.If reforms are managed fairly, they could mark a turning point in Nigeria’s long struggle for economic transformation. But if mishandled, they could deepen inequality, fuel unrest, and end up as another unfinished chapter in the country’s reform story.
Credit:The Guardian