By Kehinde Ibrahim, Lagos
THREE years after President Bola Tinubu embarked on what has become one of the most ambitious economic reform programmes in Nigeria’s recent history, the country finds itself at a critical crossroads.
The administration came into office in May 2023 promising bold decisions that would address longstanding distortions in the economy, restore investor confidence, strengthen public finances and lay the foundation for sustainable growth. Few would dispute that the government has delivered on the promise of boldness.
Within days of assuming office, it dismantled the decades-old petrol subsidy regime and initiated a far-reaching liberalisation of the foreign exchange market, two reforms successive administrations had either postponed or approached with caution because of their potentially severe social and economic consequences.
The administration argued that these measures were necessary to rescue an economy weakened by years of fiscal strain, foreign exchange shortages, declining investment, mounting debt obligations and structural inefficiencies.
International financial institutions, foreign investors and many economists welcomed the reforms, describing them as overdue corrections that would place Nigeria on a more sustainable economic path.
However, three years later, while certain macroeconomic indicators have improved, the broader economic reality presents a far more complex and troubling picture.
For millions of Nigerians, the period has been characterised not by prosperity or economic renewal, but by declining purchasing power, rising poverty, unprecedented living costs and growing uncertainty about the future.
At the heart of the debate surrounding the Tinubu administration’s economic record is the question of whether the benefits of reform have justified the enormous sacrifices demanded of citizens.
While government officials frequently point to rising foreign reserves, stronger trade balances and renewed capital inflows as evidence of progress, critics argue that these gains have come at an extraordinarily high cost.
The data suggests that much of the adjustment burden has been transferred directly to households and businesses, while the promised transformation of productive sectors remains elusive.
Perhaps the most visible consequence of the administration’s policies has been the dramatic increase in the cost of living.
The removal of fuel subsidies triggered an immediate surge in petrol prices, which in turn pushed up transportation costs, food prices and the cost of virtually every essential good and service.
For a country where millions already lived on limited incomes, the shock proved devastating. The simultaneous liberalisation of the foreign exchange market compounded the situation.
The naira, which traded at approximately N462 to the dollar before the reforms, depreciated rapidly, crossing N1,500 to the dollar within months.
Although policymakers viewed this as a necessary market correction, the practical effect was a sharp increase in the cost of imported goods, industrial inputs, machinery, pharmaceuticals and consumer products.
The result was one of the most severe inflationary episodes in modern Nigerian history. Inflation, which had already been elevated before Tinubu assumed office, accelerated dramatically under the weight of subsidy removal, currency depreciation and persistent supply-side constraints.
By December 2024, headline inflation had reached 34.8 per cent, while food inflation approached 40 per cent. For ordinary Nigerians, these figures represented more than economic statistics. They reflected shrinking meals, reduced purchasing power, rising hardship and difficult choices about how to allocate increasingly inadequate household incomes.
The consequences extended beyond consumers. Businesses, particularly small and medium-sized enterprises, faced escalating operational costs as energy expenses, transportation charges and imported input prices surged.
Many companies struggled to pass these costs on to customers whose spending power had already been eroded. Others reduced production, delayed expansion plans or cut jobs in an effort to survive.
The economic environment became increasingly challenging for manufacturers, retailers, transport operators and service providers alike.
While official figures indicate that inflation moderated significantly following the rebasing of the Consumer Price Index in 2025, many economists have questioned whether the apparent decline fully captures the reality facing consumers.
Market surveys and household experiences continue to suggest that the cost of living remains substantially higher than it was before the reforms. Consequently, the perception among many Nigerians is that inflation may have eased statistically, but not materially.
The administration’s handling of public debt has also attracted significant scrutiny. Since 2023, Nigeria’s debt profile has expanded at a pace that has raised concerns among economists and fiscal analysts.
Total public debt rose from N87.91 trillion in the third quarter of 2023 to N159.28 trillion by the end of 2025. This represents an increase of approximately N71.89 trillion within just over two years and stands as one of the fastest periods of debt accumulation in the country’s history.
Supporters of the administration argue that the increase must be viewed in the context of exchange-rate adjustments, which inflated the naira value of external obligations, as well as the need to finance government operations during a period of economic transition.
However, critics contend that regardless of the explanation, the rapid rise in debt raises serious questions about fiscal sustainability and the long-term consequences for future generations.
External debt increased from $43.16 billion to $51.86 billion during the period, while domestic borrowing expanded significantly. The growth in domestic debt has placed additional pressure on financial markets and increased the government’s reliance on local financing. This trend has implications not only for fiscal stability but also for private sector access to credit, as government borrowing can crowd out investment by businesses seeking capital.
Even more concerning has been the sharp rise in debt servicing costs. Between the first quarter of 2023 and the fourth quarter of 2025, debt service obligations increased from N1.24 trillion to N4.86 trillion.
In effect, the cost of servicing government debt nearly quadrupled within a relatively short period. Exchange-rate depreciation played a major role in this increase by inflating the naira value of external debt repayments, while higher interest rates increased the cost of domestic borrowing.
The implications for public finances are profound. Although government revenues have increased significantly under the Tinubu administration, much of the additional revenue has been absorbed by debt servicing obligations.
As a result, the fiscal space available for infrastructure development, healthcare, education, social protection and other critical sectors remains constrained. This reality undermines one of the central arguments in favour of the reforms: that stronger public finances would create greater capacity for development spending.
The administration has often highlighted improvements in revenue generation as evidence that its policies are working. Federal Government revenue rose substantially between 2023 and 2024, driven by stronger tax collection, customs receipts, exchange-rate adjustments and higher oil-related earnings.
Non-oil revenue in particular recorded notable growth, reflecting efforts to broaden the tax base and improve collection efficiency.
Yet despite these improvements, the fiscal position remains fragile. Expenditure continues to exceed revenue, requiring additional borrowing to bridge budget deficits.
In effect, the government is collecting more revenue than before, but it is also spending more on debt servicing and maintaining operations within a difficult economic environment.
Consequently, the average Nigerian has seen little evidence that higher government revenues have translated into improved public services or economic relief.
Monetary policy has represented another contentious aspect of the administration’s economic management. Faced with rising inflation and exchange-rate instability, the Central Bank of Nigeria embarked on one of the most aggressive tightening cycles in its history. The Monetary Policy Rate was raised repeatedly, eventually reaching 27.5 per cent before being adjusted slightly downward.
The objective was clear: contain inflation, stabilise the currency and restore confidence in monetary policy. However, the consequences for businesses and consumers have been significant.
Higher interest rates increased borrowing costs across the economy, making it more difficult for companies to finance expansion and for households to access credit. Small businesses, already struggling with rising operating expenses, found themselves confronting an increasingly restrictive financial environment.
Critics argue that while inflation control is important, the emphasis on aggressive tightening has come at the expense of economic growth and job creation. The policy effectively prioritised macroeconomic stability over productive sector expansion, creating a situation in which businesses faced rising costs from both inflation and borrowing rates.
Adding to the complexity is the fact that money supply continued to expand despite repeated interest-rate hikes. Broad money supply rose from N55.7 trillion in May 2023 to nearly N125 trillion by April 2026.
This development has raised questions about the overall effectiveness of monetary policy and whether inflation could have been addressed more effectively through a combination of structural reforms and targeted interventions.
Supporters of the administration often point to improvements in external sector indicators as evidence that the reforms are yielding results. Foreign reserves, which had come under pressure in 2023, recovered strongly over the following years.
By early 2026, reserves had risen to nearly $50 billion. Trade surpluses also expanded significantly supported by stronger exports and reduced import demand following currency depreciation.
However, these achievements require careful interpretation. Trade surpluses driven by weaker import demand are not necessarily indicative of stronger productive capacity.
In many cases, imports declined because businesses and consumers could no longer afford foreign goods at prevailing exchange rates. Similarly, stronger reserves do not automatically translate into improved living standards if underlying structural challenges remain unresolved.
Capital inflows have also recovered from the lows recorded in 2023. Portfolio investment returned as investors responded to higher yields and improved confidence in the foreign exchange market.
Yet the composition of these inflows remains a source of concern. Foreign direct investment, which is generally regarded as a more reliable indicator of long-term economic confidence, has remained relatively weak.
This distinction is important because portfolio flows are inherently volatile. Investors attracted by high interest rates can quickly withdraw capital in response to changing market conditions.
Economic growth presents a similarly mixed picture. Gross Domestic Product growth improved modestly during the period, reaching approximately 3.87 per cent in 2025.
While this represents an improvement compared to previous years, it remains below the level required to generate sufficient employment opportunities and meaningfully reduce poverty in a rapidly growing country.
Nigeria’s population continues to expand at a rate that places enormous pressure on economic resources. To achieve significant improvements in living standards, growth would need to accelerate well beyond current levels. Instead, the country remains trapped in a cycle of modest expansion that is insufficient to address longstanding development challenges.
Perhaps the most troubling aspect of the current economic landscape is disconnecting between macroeconomic indicators and public sentiment. Policymakers frequently emphasise improvements in reserves, trade balances, revenues and investor confidence.
Yet many Nigerians evaluate economic performance through a different lens. They assess it based on the prices they pay for food, transportation and housing; the availability of jobs; the affordability of healthcare and education; and their ability to maintain a reasonable standard of living.
By those measures, the past three years have been exceptionally difficult. The burden of adjustment has fallen disproportionately on households and small businesses, while the benefits of reform remain concentrated in indicators that have yet to produce widespread improvements in welfare.
The Tinubu administration deserves credit for confronting structural problems that previous governments often avoided. Few leaders have been willing to implement reforms of such magnitude despite the political risks involved. However, courage alone cannot be the measure of economic success. Ultimately, reforms must be judged by their outcomes and by their ability to improve the lives of citizens.
Three years after the launch of the administration’s economic agenda, Nigeria remains an economy in transition rather than transformation.
The central challenge facing the administration is no longer whether it can stabilise key economic indicators. It is whether it can convert that stability into tangible and inclusive growth that reaches ordinary Nigerians.
Until that happens, the reforms will remain a subject of intense debate, viewed by supporters as necessary sacrifices for future prosperity and by critics as policies that have imposed extraordinary costs without delivering commensurate rewards.
The verdict on Tinubu’s economic legacy, therefore, remains unfinished, but for many Nigerians still grappling with the consequences of adjustment, the promised dividends of reform appear more distant today than they did when the journey began.
