Waziri Adio
President Bola Tinubu’s two years in office have evoked two divergent views: the rosy view and the dim view. The rosy view paints the picture of a bold reformer who moved swiftly to implement consequential and necessary policy shifts that, within a short while, are already yielding macro-economic dividends. The dim view sees a president whose signature policies have unleashed concentrated and unceasing pains on most Nigerians, especially the poorest of the poor.
The two views are valid and factual, another reminder that two different things can be true at the same time. As he commences the second half of his tenure, President Tinubu should not get too excited about the rosy view or be dismissive of the dim view. He needs a tempered view himself, especially in his quiet moments. He needs to take this to heart: the next generation of reforms, and the really consequential ones, should be about how to quickly improve the welfare of the generality of Nigerians.
Let’s refresh our memories with a quick background to the two major reforms that are principally the basis of the opposing views on Tinubu’s stewardship so far. The case for the removal of petrol subsidy and for the reform of the foreign exchange regime was very compelling. But it was not evident to most Nigerians. The country was practically spending the money it didn’t have and living a bogus and dangerous lie.
In 2022, we burned $10 billion on petrol subsidy alone; debt service at some point gulped 97% of government revenue; and multiple exchange rates not only created opportunities for arbitrage and corruption for a few but was also a drag on foreign investments and our external reserves. On accountof dwindling but disguised reserves, rationing of forex for imports and other needs had not only commenced but the rationing of essential items seemed only a matter of time. The country was right at the edge of a cliff, just inches away from a devastating crash. But a probable crash and an actual crash are not experienced the same way. One is conceptual; the other is concrete.
To those in the rosy corner, Tinubu did not wait for the conceptual crash to become concrete. He acted swiftly, within two weeks of taking charge, in removing both distortions. There is a lot to pick issues with in his approach, especially in terms of sequencing of the reforms, the apparent lack of second order thinking and the absence of a well-thought-out strategy for dealing with the fallout. But what cannot be denied is that Tinubu showed the will to act and he acted on time.
The reforms, as expected, introduced significant shocks to the country and to Nigerians. The combined effect of the two reforms translated to rapid and major increases in prices of food, transportation, energy, rent, and medication for individuals and in the prices of critical inputs for companies. Individuals and firms took the hit and some are still taking the hit. However, recent data indicates that the effects of the shocksare beginning to wear off and that the reforms have been good to Nigeria’s public finance and to some domestic and foreign investors.
The economy grew by 3.4% in 2024, Tinubu’s first full year in charge. According to the World Bank, the 2024 GDP figure was the highest since 2015, save for the expected post-COVID bump in 2021 and 2022. Even after accounting for the recent rebasing, headline and food inflation figures have started to track down. The official and parallel exchange rates have almost converged. Stability and supply have improved in the forex markets, even when USD at >N1500 is still adjudged undervalued. The net external reserves increased from about $4 billion in 2023 to $23 billion in 2024, and this was after CBN cleared FX backlog of about $10 billion. Gross external reserves at a point notched above $40 billion, leaving the country healthy cover for many months of imports.
Government’s financial position appears the biggest beneficiary. According to the World Bank’s May 2025 Nigeria Development Update (‘Building Momentum for Inclusive Growth’), Nigeria’s consolidated fiscal deficit as a percentage of GDP reduced from 5.4%in 2023 to 3.0% in 2024. With significant across-the-board increases from revenue sources (except from NNPCL), gross government revenuessoared from N20.7 trillion in 2023 to N37.1 trillion in 2024, an increase of 79.2%. World Bank data also shows that Nigeria’s gross revenue as a portion of GDPjumped from 8.8% in 2023 to 13.3% in 2024. The bulk of the revenue bump went to the states whose total revenue increased from N7.2 trillion in 2023 to N13.9 trillion in 2024, mostly as a result of the refunds to states (43% of the total refunds and deductions from FAAC in 2024 went to the states).
The fact of the matter is that the two reforms (alongside other monetary and fiscal policies) have been good to the three tiers of government (especially the states). A major part of the revenue boost though was exchange gain—the exchange rate in the 2024 budget was N800/$1 while the average exchange rate for the year was N1535/$1. The substantial increase in revenue year-on-year clearly was not exclusively from improved efficiency in revenue collection. This is not necessarily a bad thing, but the role of exchange gain in 2024 needs to be acknowledged. This doesn’t detract from the fact that governments across the board now have a better fiscal headspace. This is a good thing, if the extra money is well spent.
The reforms are also good for portfolio investors, as they get good returns on their investments and do not have to worry too much about taking their money out when needed. So, it is not surprising that endorsements have been pouring in for the Tinubu administration. Moody’s on Friday upgraded Nigeria’s outlook from positive to stable. The Financial Timesearlier wrote a gushingeditorial on Tinubu’s reformsand urged the president to stay the course. The FT editorial seems to alignwith the sentiments of most investors and foreign observers of Nigeria. They are very bullish on Nigeria at the moment.
These observers and the even officials of the administration might be surprised that most Nigerians do not share their rosy outlook. The reason for this divergence is simple. The improvement in macro-economic outlook and public finances and in the opportunities for investors is hardly rubbing off yet on most Nigerians, and may not trickle down. It is possible to acknowledge the results from the reforms at the macro level and also recognise the continuing immiseration at the micro level. Two things can be true at the same time.
(As a quick aside, I don’t think it is useful denying official data simply because it doesn’t align with one’s sentiments. Of course, data can be interrogated, especially when there is evidence that the data or the methodology is dodgy. But dismissing positive data offhand, without basis, and gleefully citing negative data from the same sources, without question, suggests something else is at play.)
As stated earlier, the dim view is not always oppositional politics. Those who hold the dimview gather and process data from their lived realities, and do not need the national statistics agency, the CBN, the World Bank, FT and others to tell them what is going on in their lives. Factually, and sadly so, the surge in government revenue has not been complemented with material improvement in citizens’ welfare or a reduction in the hardship in the land. True, food prices have stabilised and are falling in some instances. But people still remember how much they paid for a cup of rice or a tuber of yam two years ago and how much they are paying now. They have the same memory of the costs of a pack of paracetamol, a bar of soap, a bike or bus ride etc. then and now.
The administration had promised to provide reliefs to cushion the negative impact of the reforms on the poorest. But most of the promised reliefs have either been too minute or too poorly delivered. There is no proper public record of the promised distribution of grains from the reserves. The well-applauded presidential decision to pause duties on imported rice and other items became a shameful drama.
Two years after, the N25,000 in three tranches promised as palliatives to 15 million poorest households has been abysmally delivered. The government makes a song and a dance of CNG buses and free conversion of cars from petrol to CNG. It is doubtful how much difference this can make and whether this should be the central plank of moderating the devastating impact of petrol subsidy removal on individuals. Increasing the minimum wage from N30,000 to N70,000 is a good idea. Assuming all tiers of government pay the new minimum wage, how much dent will this make in a country where the informal sector accounts for 93% of the labour force? And what is the plan for those outside the formal sector and whose options are sadly limited to accepting whatever wage is available or being jobless?
Without a doubt, it is good that the country has a more stable macro-economic outlook and that the government has more money. But what government is spending the extra revenues on is more important. We need to spend smarter and better, especially in areas that directly impact the welfare and the productive capacities of our people. There is little indication that the states, currently flush with extra cash, get this. But the states are not alone. The 2025 federal budget, and parallel budgets that preceded it, make dismal reading in this respect, littered with wasteful and bogus items that neither reflect the tough times we are living in nor align with the priorities of a majority of our people.
As stated over and over here, both the rosy view and the dim view of Tinubu’s two years in office are valid and factual. The emerging macro gains do not invalidate the continuing micro pains. While enjoying plaudits from those with the rosy view and hoping the adulation will endure, the president will do well to pay more attention to the legitimate concerns of those with the dim view. We need macro-economic stability and we need to consolidate on the gains. But we also need significant improvements in the welfare of the majority of our people who have borne the brunt of the overwhelming shocks of the last two years. Having the first without the second is pointless.