REFORM TALKS with Enam Obiosio
In a country long burdened by economic inertia, Nigeria definitely is charting a new course because over the past two years, a bold and far-reaching reform agenda has taken root under President Bola Ahmed Tinubu’s administration.
It is an agenda defined not just by ambition, but by difficult choices – ones that many before had promised but few had dared to implement. From removing long-standing fuel subsidies to restructuring fiscal and monetary policy, the Nigerian government is attempting to realign the economy toward inclusive, sustainable growth.
The reforms have not gone unnoticed. The International Monetary Fund (IMF), in its 2025 Article IV Consultation with Nigeria, acknowledges the scope of the transformation and the results already emerging. Still, the IMF makes clear: this is just the beginning. The path ahead remains steep, and success will depend on whether the gains of reform reach ordinary Nigerians—and whether the government can cushion the vulnerable from the pains of transition.
“Nigeria’s potential is beyond doubt,” says Axel Schimmelpfennig, IMF Mission Chief to Nigeria. “But achieving it will require continued reforms and an effective social safety net to carry the most vulnerable along.”
A Grim Inheritance, A Bold Response
When the Tinubu administration took office in 2023, Nigeria was grappling with a convergence of crises: stagnating growth, rising poverty, food insecurity, and inflation. Between 2014 and 2023, real per capita GDP declined by an average of 0.7% annually. Inflation crossed the 20% mark, while public debt and subsidy burdens left little fiscal space for social or capital investments. Currency instability forced Nigerians to depend on volatile parallel markets.
The government’s response was swift – and controversial. Fuel subsidies, which once consumed up to a quarter of Nigeria’s budget, were removed. The Central Bank stopped its practice of financing fiscal deficits, while a unified exchange rate regime replaced multiple FX windows. By the end of 2024, net foreign exchange reserves had risen from just under $4 billion to $23 billion. Investor confidence returned, credit rating agencies upgraded Nigeria, and a historic return to international capital markets was recorded.
Private sector-led milestones followed. The $20 billion Dangote Refinery began exporting jet fuel to the U.S. and Saudi Arabia. Nigeria achieved a record trade surplus, and for the first time in decades, local refineries began operating at scale.
Yet, beneath these macro-level successes, the reality for many Nigerians remains harsh.
Reform Without Relief?
The IMF warns that while reforms are necessary, they must be paired with relief for those hit hardest.
“Nigeria lacks an effective social safety net to cushion the impact of shocks on the most vulnerable,” notes Christian Ebeke, IMF Resident Representative in Nigeria.
The removal of subsidies, for instance, though economically sound, has made life more difficult for millions already teetering on the edge. The government has responded by expanding cash transfer programs and scaling up food production. Over 280,000 farmers have received subsidies under a new dry season farming initiative. The National Agricultural Development Fund (NADF), now operational, was allocated significant funding to drive mechanization, irrigation, and rural infrastructure.
But many challenges remain. Electricity access is still limited. Poor roads and logistics chains dampen trade. Health care and education remain underfunded. Without a comprehensive safety net, reform fatigue could set in – diminishing public support and eroding the momentum gained.
Three Urgent Priorities
The IMF outlines three strategic imperatives that Nigeria must pursue to consolidate its gains:
- Inclusive Growth Must Take Center Stage
It is not enough for GDP to grow – it must be inclusive. More Nigerians must feel the impact of reform through jobs, access to finance, and lower cost of living. A fully digitized, scaled-up cash transfer system, capable of supporting the poorest households, is urgently needed.
- A Stronger Budget Framework Is Crucial
Nigeria needs realistic, transparent budgeting. Fiscal assumptions must match economic realities. Public expenditure must be tracked and measured for performance. Ministries must be accountable not just for spending but for delivering value. As the IMF warns, “delivering effective investments in people and infrastructure requires strong expenditure management.”
- Domestic Revenue Mobilization Is Non-Negotiable
Nigeria’s tax-to-GDP ratio remains among the lowest in the world. The government must continue to expand the tax base and ensure that everyone pays their fair share. While 2024 saw non-oil revenues rise to N21.6 trillion, more effort is needed. Until revenue improves, the fiscal room to invest in infrastructure and social programs will remain constrained.
Not Just a Turning Point – A Test of Leadership
President Tinubu’s reforms have bought Nigeria time and credibility. But credibility is fragile. The next phase – delivery – is the true test of leadership.
The Compendium of Reforms released by Dr. Tope Fasua, Special Adviser To The President On Economic Affairs Through The Office Of The Vice President, in May 2025 paints a hopeful picture: 160,000 new hectares cultivated, $6 billion balance of payment surplus, N132 billion budgeted for agriculture, N55 billion for student loans, and N100 billion set aside for consumer credit. But behind each number are citizens whose lives either improve – or remain unchanged.
Nigeria is not short on ambition or blueprints. What it now needs is institutional strength, public trust, and a moral commitment to ensure that reforms work for everyone – not just the elite.
As Schimmelpfennig cautions, “The right policies can help Nigeria realize its potential as an African and global economic powerhouse—but only if they are sustained and inclusive.”
Nigeria’s moment is here. Whether it will rise, stumble, or stall depends on the courage of its leaders—and the resilience of its people.
