…Elite Business Journal Admits Nigerians Still Face Poverty, Pain
By Yinka Giwa
Nigeria may be approaching a new phase of economic recovery following years of decline, as early gains emerge from the structural reforms introduced by President Bola Tinubu, according to a report by The Economist.
The magazine recalls that when Nigeria returned to civilian rule in 1999, then-President Olusegun Obasanjo embarked on liberal economic reforms aimed at reversing decades of military-era mismanagement. Though initially dismissed by critics, those policies helped tame inflation, attract investment and raise annual GDP growth to about 7% by the end of his second term in 2007. That momentum, however, was later lost, and over the past decade Nigeria’s GDP per capita has fallen.
The Economist reports that evidence is now mounting that the country could be heading for another period of economic improvement. Over the past two and a half years, President Tinubu, elected in 2023, has implemented far-reaching reforms similar in scale to those undertaken during the Obasanjo years. As he prepares for a possible second-term bid in 2027, some of those measures appear to be delivering results.
According to the report, the Tinubu administration inherited an economy in deep distress. When he assumed office in 2023, the Central Bank of Nigeria faced about $7bn in obligations it could not meet, prompting a mass exit by international investors. The bank’s credibility had been weakened by loose monetary policy, mismanagement of foreign-exchange reserves and an unsustainable multi-tier exchange-rate system. At the same time, the federal government spent about $10bn in 2022 alone on fuel subsidies.
In response, the government abolished the fuel subsidy and scrapped the tiered exchange-rate regime, allowing the naira to float. The central bank tightened monetary policy aggressively to curb inflation, while the government stepped up security efforts in the Niger Delta and introduced tax incentives to attract investment and revive oil production.
Nearly three years later, The Economist notes that the social impact of the reforms remains severe. Nigeria’s population of about 230 million, particularly the poor and the middle class, continues to struggle with higher fuel and food prices, and poverty levels have risen. However, key economic indicators are improving.
The annual inflation rate, which reached a nearly 30-year high of 34.8% in December 2024, fell to 15.2% by December 2025. Economic growth is returning, with the International Monetary Fund projecting GDP growth of 4.4% in 2026. After two sharp devaluations in 2023, the naira has stabilised, while foreign-exchange reserves have increased to $46bn, the highest level in seven years.
The report says improving macroeconomic stability is helping to restore investor confidence. On January 22, Shell announced plans to finalise, by 2027, development of a $20bn offshore oilfield that has remained untapped for more than two decades. Exxon Mobil has also committed $1.5bn to deepwater oil development through 2027.
Local business leaders are said to be increasingly optimistic, as oil and gas production rises, driven largely by domestic firms improving output and reducing losses in onshore projects in the Niger Delta, an area that has become safer following renewed government focus on security.
These developments could provide the government with some fiscal relief, particularly as a weaker naira boosts the competitiveness of non-oil exports such as cocoa and cashew nuts. Recent reforms to taxation and tax administration are expected to improve government revenues in the coming years, while falling inflation may gradually ease cost-of-living pressures.
However, The Economist cautions that significant risks remain. Savings from the removal of fuel subsidies have largely been absorbed by debt servicing, with about 60% of government revenues currently devoted to servicing public debt. Despite government assurances of reduced borrowing, budget projections suggest borrowing will continue.
“The government is broke. There’s nothing to invest in the future,” the magazine quoted Esili Eigbe of Nigerian consultancy Escap as saying.
Unless the government cuts civil-service salaries, restructures existing loans or reduces other major spending, the additional revenue from tax reforms is unlikely to be available for infrastructure, health care or education. David Cowan, an economist at Citi, was quoted as saying that while the deficit has narrowed, there has been little improvement in the government’s ability to deliver capital projects.
For many Nigerians, the benefits of the reforms remain distant. The report notes that food prices have surged, with the cost of a kilogram of rice nearly quadrupling since May 2023, while wages have stagnated. Even with inflation easing, many households continue to struggle to afford basic necessities.
The Economist concludes that while Mr Tinubu’s reforms have stabilised the economy and revived parts of the oil and gas sector, broader and more inclusive growth will be needed for ordinary Nigerians to experience the kind of economic gains seen during the Obasanjo era.