POLICY STATEMENT 026 BY THE INDEPENDENT MEDIA AND POLICY INITIATIVE (IMPI)
Tinubu administration’s restructuring of the Nigerian economy
The outcome of our audit of global and domestic institutional ratings and quantification of Nigeria’s ongoing economic reforms indicate that the country is being increasingly recognized as a rising economic force and admired across the globe for the resolve shown by its leader in implementing difficult but necessary reforms.
However, we have also observed a strain of incredulity in some quarters of the political class and the media that continue to belie the profound management of the national economy by the federal administration of President Bola Ahmed Tinubu. They trenchantly reduce the nation’s economic trajectory to a characterization of high cost of living, bereft of the profound manoeuvres to restructure the national economy away from the misalignments and distortions of the past.
After coming to office on 29 May 2023, President Tinubu embarked on a deep economic reform programme, which global, and domestic institutions including individuals of responsible and objective standing have all conceded to be necessary to right the public finances of Africa’s most populous country.
Of course, those measures have come at a cost to many ordinary Nigerians, who are facing a cost-of-living crisis on the heels of the implementation of what is now known as the twin policies of petroleum subsidy removal and the harmonization of the foreign exchange’s multiple windows. This however does not define the impact of the federal administration’s reforms.
Shortly after, market- determined petrol prices increased 77 per cent and the local currency, the Naira, weakened 42 per cent in 2024. Both key underlying factors contributed to inflation, which stood at 33.2 per cent in 2024, up from 24.7 per cent in 2023. To dampen inflation pressures, the Central Bank of Nigeria (CBN) tightened the policy rate to 27.5 per cent, creating in its wake different pressure points in the economy that include increased price of food, higher cost of movement of goods and people, and ballooning cost of import of raw materials and household items.
Most impacted were the employed urban poor population, that is, those earning low wages and have to pay for transportation daily to get to work.
This immediate manifestation of price outburst across consumption items and services had always been expected by all past governments and managers of the nation’s economy. The unspoken word at that time was that the harbinger of any form of reform around petroleum subsidy and multiple exchange rates was condemned to unpopularity by the political class.
For that reason, all civilian administrations from 1999 merely nibbled at the idea of addressing disconcerting issues arising from subsidy removal and harmonization of the multiple exchange windows. These former leaders took to their heels at the first sign of protestation coming from the opposition political class.
Yet, the challenges and associated economic constraints consequent upon the sustenance of what had been described as ruinous policies of fuel subsidy and multiple exchange rate, refused to disappear.
According to the World Bank, Nigeria’s total revenue had rocketed to USD 67.9 billion in 2010 from a low of USD10.8 billion in 2001, but in an exemplification of unreasoned profligacy, the country spent over USD 30 billion on fuel subsidies between 2005 and 2023.
This has had a significant impact on funds available for critical infrastructure and other essential sectors such as education, health, and defence.
According to the Debt Management Office (DMO), the country’s public debt stock increased as the government had to borrow N1trn to finance fuel subsidy in the year 2022. All these are notorious facts and data in the public which we do not need to reiterate here. Suffice to say, however, that at that point in the history of Nigeria, it is our considered opinion that if the succeeding government to the Muhammadu Buhari administration shied away from confronting the distortions in the national economy, the country was surely heading to bankruptcy.
For us, the courage shown by President Tinubu since 29 May 2023, is unusual and underlines the higher calling of the President in the nation’s political milieu. Coming on the back of this, we can say with much confidence that, indeed, there had been no comparable first two years in office as that of President Tinubu since the nation returned to democracy in 1999.
In those two years, we can testify by verifiable data that Nigeria recorded a substantial economic restructuring in measures beyond the contemplation of the various advocacy around restructuring demanded of Nigerian leaders of the past 26 years.
The first indication of the urgency of reforming the economy was the consumption pattern of Premium Motor Spirit (PMS) imported into the country. In June 2022, according to NNPC Limited, daily consumption of PMS had increased to over 103 million litres per day. However, at least 58 million litres of that were being smuggled out of the country in apparent exploitation of the subsidy regime.
About five months after the removal of fuel subsidy, the national consumption average declined to a range between 43 million and 46 million litres. This is proof that smugglers and other West African countries benefitted more from fuel subsidy than Nigerians. The country was losing five per cent of its GDP on fuel subsidy money which was going to just a few at that time.
Coming along with the crash in PMS consumption was the enablement of the environment for private sector investment in the downstream sector, leading to the development of local refineries and the creation of jobs. Practically speaking, coming from an era when no refinery was functional in the country, nine refineries had been completed within two years of subsidy removal. This is headlined by the 650,000 barrels-a-day Dangote Refinery which boasts of being the largest single train petrochemical refinery in the world.
The Dangote Refinery has transformed Nigeria from a net importer of PMS and other petroleum products to a net exporter. The country now saves $20 billion annually by no longer importing petrol.
This streaming of petroleum refinery companies has enhanced the country’s energy security. The deregulation of the sector has stimulated increased economic activities so much that the country is recording a league of more profitable downstream companies.
Counted in this number are Oando Plc, TotalEnergies Marketing Nigeria Plc, MRS Oil Nigeria Plc, Aradel Holdings Plc, Eterna Plc and Conoil Plc. The six companies generated an estimated N6.69 trillion revenue in 2024, about 57 per cent increase when compared to N4.27 trillion in 2023. This implies higher tax payment threshold for the government. Analysis of their unaudited results and accounts for the period ended December 31, 2024, showed that the six companies declared N440.09 billion profit before tax in 2024, a significant increase of 84 per cent from N239.01 billion in 2023.
These companies benefited from the Federal administration’s reforms in recent years and have attracted investments in the oil and gas sector.
A major fallout of the removal of fuel subsidy is the increase in food prices which reflect in increased inflation figures. Though it had declined to 21.26 percent in April 2025 year-on-year, the food inflation rate in June 2024 was a high of 40.87 percent on a year-on-year basis.
Though it has been argued that the rebasing of the nation’s inflation index may have accounted for the decline in inflation rate, we, however, submit that more fundamentally, the efforts of the federal administration to increase food production should take credit for falling food prices being witnessed in current time.
We see a clear commitment of the federal administration to agriculture with the conceptualization and streaming of a bouquet of policies that include the National Agricultural Growth Scheme and Agro Pocket (NAGS-AP), National Agribusiness Policy Mechanism (NAPM), as well as the resuscitation of the National Agricultural Land Development Authority (NALDA) to strengthen productivity and address sector challenges and the deployment of Common Agricultural Policy (CAP), to provide income support to famers.
The CAP policy has radically cut the link between subsidy and production, to encourage a paradigm shift from the previous market support, to producer support, on the condition that the farmers will look after the farmland to ensure food safety. CAP has boosted food production, leading to the current reduction in the prices of food in the nation’s market.
The Agricultural policy that shifts focus from market to production, has also resulted in a $2.5 billion livestock investment from Brazilian meat company JBS. The company has decided on a five-year investment plan in Nigeria and is currently building six new factories to process beef, chicken, and pork in the country. This is beside the federal government facilitating a total of $14 billion of Foreign Direct Investments (FDI) into the livestock sector of the economy.
The federal administration has also launched a dry season farming programme with a view to cultivating 118,657 hectares of wheat in 15 states. This resulted in an output of 474,628 metric tons of wheat. Jigawa State exceeded its allocated target by 15,000 hectares. In addition, the government also released 42,000 metric tons of assorted food commodities to vulnerable populations and distributed 58,500 metric tons of milled rice to all states.
The federal administration equally approved the duty-free importation of major food items like rice, beans and wheat, to cushion the impact of the high food prices. The impact of all these deployments reflects in the year-on-year food inflation rate which eased to 21.26 per cent in April, with a slight month-on-month drop to 2.06 per cent, down from 2.18 per cent in March.
This aggregate to a month-on-month inflation rate which declined significantly to 1.86 per cent in April, compared to 3.90 per cent in March, a clear signal of slowing inflationary momentum. By our reckoning, this did not happen by chance. It shows that the hard decisions and subsequent policies rollout are beginning to bear fruit, and as inflation eases, we expect to see corresponding improvements in consumer purchasing power and living conditions.
Ongoing Foreign Exchange Dynamics
The immediate reflection of the positive move inherent in the unification of the foreign exchange windows is the increase in revenue for states and local governments and a reduction in public debt. The Federal Government’s revenue rose by 82.4 per cent from N6.8trn in 2023 to N12.4trn in 2024, driven by the unification of the foreign exchange rates, enhanced tax administration, and reforms in treasury remittances, according to data sourced from the World Bank.
The development represents a N5.6trn increase in federally collected revenue and a significant rise in the government’s revenue-to-GDP ratio from 2.9 per cent in 2023 to 4.5 per cent in 2024. The unification of the FX rate led to a significant revenue windfall, as various FX- denominated revenues (Oil, Value Added Tax, Company Income Tax, and Customs) used to be transferred to the Federation at the official rate, which was 53 per cent lower than the parallel market rate in 2022, causing large forgone revenues of N6.2trn. This disparity had led to large revenue losses before the reform.
As part of its strong showing on foreign exchange reforms, Nigeria has completed the repayment of the principal amount of its $3.4bn loan from the International Monetary Fund (IMF) with the final payment made on April 30, 2025.
The loan, disbursed in full on April 30, 2020, was part of IMF’s emergency COVID-19 Rapid Financing Instrument, (RFI) aimed at helping Nigeria cope with the economic disruptions caused by the pandemic, including falling oil prices, a recession, and fiscal pressures.
This is in addition to the Federal administration’s successfully paying down its first ever Sovereign Sukuk of N100 billion, issued in 2017, thus fulfilling all obligations to investors and reinforcing its commitment to transparent and responsible debt management. It was disclosed that all investors in the 2017 Sukuk have received full redemption of their investments, having earlier been paid their rental returns.
We can report that the Central Bank of Nigeria (CBN) has activated market-driven pricing for the naira, significantly enhancing transparency and restoring investor confidence. We observe that with disciplined reforms and policy clarity, the naira has stabilized at a more sustainable level against the U.S. dollar. The once-wide gap between the official and parallel market rates has all but disappeared, a first in Nigeria’s recent history, which has effectively addressed the once-upon-a-time troubling distortion in the forex market through round tripping of official market sourced forex and speculative arbitrage.
Indeed, the battle to close the gap between the official market and parallel market rates had been raging for decades, with little results to show for it. This has been effectively dealt with as Central Bank-led reforms have closed the huge gap between both markets.
For instance, while the naira exchanges at N1,589 at the Nigerian Autonomous Foreign Exchange Market (NAFEM), it closed at N1,620 per dollar at the parallel forex market a as at June 6, 2025, a difference of N31. This closing in the spread between the official and parallel markets has naturally reduced the tendency for speculative trading and round-tripping. This renewed stability in the exchange rate has restored confidence in the market and spurred autonomous forex flows to the economy through formal channels.
Beginning in September 2024, we have continued to observe net foreign exchange (FX) inflow through the autonomous market which increased significantly by 91.21 percent in five months after the FX policy of the CBN, known as RT 200 FX was introduced. Specifically speaking, autonomous inflows come outside the government’s earnings of FX. It comes from private sources unlike remittances that come from oil, being Nigeria’s major source of FX.
Foreign Exchange from oil goes into federation account and it is converted into official reserves. When other companies bring forex through the CBN or I&E window it is considered forex from autonomous inflow. We note that before the reforms kicked in, exporters avoided the formal reportage of their forex earnings and do not make them available on the I&E window.
Some of those inflows come in documented as inflows but sit with the companies because there was no incentive to take the exported generated FX to the I&E window at the then government-determined rate of N460.
A major highlight of the Forex reforms is that in 2024, Nigeria recorded a balance of payments surplus of $6.83 billion, the strongest in many years, driven by rising exports and renewed capital inflows. For us, this is another indication that the reforms are delivering results. And we agree with the Governor of the CBN, Olayemi Cardosso, who asserts that the country has moved from a position of vulnerability towards to strength, and as such, the economic trajectory is beginning to turn positive.
As a result of increased revenue, the economy is signaling its transformation to a credit worthy jurisdiction. Between June 2023 and December 2024, at least 33 Nigerian states and the Federal Capital Territory (FCT) reduced their domestic debt by a total of N1.85 trillion out of a total debt of N5 trillion. This indicates a commitment to fiscal responsibility and a move towards greater financial stability.
Evidence of Growing Confidence in the Economy
With critical macro-economic indicators evidently in alignment, investors are growing confidence in the economy by playing long term with their investment stakes in Nigeria. They are staking more funds on longer-tenor assets in the expectation that ongoing reforms would lead to improved macroeconomic performance in the years ahead. Subscription patterns in Nigerian sovereign issuances have shown a stronger appetite for long-term bonds with instruments with the most elongated period like the Federal Government of Nigeria (FGN) February 2031 bond – rising by 497.5 per cent to N328.6 billion, compared with N55 billion recorded when a similar bond was offered in September 2024. In addition, total subscriptions for the FGN April 2029 bond also increased from N22.6 billion recorded in September 2024 to N60.7 billion at the last auction in April 2025.
There is unanimity among investors that they were locking into longer-term assets because they expected inflation rates to reduce on the back of the government’s economic reforms. This implies that investors expect lower inflation and interest rates over the long-term, leading to higher bond prices and lower reinvestment risks indicative of a strong, positive perception of recovery and growth for the Nigerian economy.
Emerging Foreign Exchange Dynamics
The unification and depreciation of the naira has not only played a key role in improving the Nation’s external balances in 2024 it has also availed the country’s new possibilities. The country’s current account balance (CAB) surged by 185 percent to $17.2 billion, or 9.2 percent of GDP, driven by compressed imports and higher formal remittance inflows, which reached an estimated $21 billion in 2024. While oil production rose, dollar earnings from oil exports declined, but non-oil exports increased by 25 percent, buoyed by the more competitive exchange rate.
These, by our estimation, account for the significant decline in volatility in the foreign exchange (FX) market falling below 0.5%, another indication of the stabilizing effect of Nigeria’s monetary and fiscal reforms on the macroeconomic environment.
The reduction in exchange rate volatility Is a key indicator of the improving health of the Nigerian economy, underpinned by restored investor confidence, improved foreign exchange reserves, and greater transparency in the Central Bank of Nigeria’s operations. This reduced volatility is seen as critical to rebuilding investor trust, as it provides a more predictable environment for planning and foreign capital inflows.
A direct consequence of the exchange rate adjustment is that the naira has emerged more competitive and has positioned Nigeria to take advantage of regional trade opportunities, especially within the ECOWAS subregion
Currency Depreciation and the New Impetus for Non-Oil Exports
The naira depreciation, particularly the change in the official exchange rate calculation on January 30, 2024, significantly weakened the currency. This depreciation meant that a dollar earned from non-oil exports translated into more naira than it would have been previously. This saw the naira value of non-oil exports soaring. In 2024, Nigeria earned N9.65 trillion from non-oil exports, according to a report from the Nigerian Export Promotion Council (NEPC). This represents a significant increase from the N3.14 trillion recorded in 2023. In terms of US dollars, Nigeria’s non-oil exports reached $5.45 billion, a 20.7 percent increase compared to the previous year. The increase in non-oil exports underscores Nigeria’s efforts to diversify its economy and reduce its reliance on oil revenue and the rising demand for Made-in-Nigeria products, for which we commend the federal administration.
Even in current terms, despite global trade tensions, Nigeria’s non-oil exports still shows a significant 24.75 percent increase in the first quarter of 2025 reaching $1.791 billion. This increase is attributed to factors like increased economic activities and initiatives like the $50 million incentive package for female exporters. To our mind, it is apparent that Nigeria is actively working to reduce its reliance on oil revenue, and the growth in non-oil exports is a key component of this diversification strategy.
The Changing Face of Direction of Credits From Government to the Private Sector
Credits from banks to Nigerian manufacturers have soared to a five-year high. Data from the Nigerian Exchange Group (NGX) show that loans to the manufacturing sector by the country’s top-tier banks increased to N6.4 trillion in 2024, representing a 218.4 percent year-on-year increase, and the highest level since 2020 when the total stood at N2.06 trillion. Tier one banks’ loans to manufacturers rose from N2.06 trillion in 2020 to N2.56 trillion in 2021 and further to N3.4 trillion in 2022. It hit N4.6 trillion in 2023 before skyrocketing to N6.4 trillion in 2024.
In contrast, after months of elevated borrowing, credit to the federal government fell to N23.55 trillion in April 2025, the lowest level seen in a year. The figure represents a sharp 8.9 percent drop from N25.86 trillion in March. We believe this is a signal of a deliberate shift by the government to scale back on domestic borrowing.
On a general note, credit to the private sector climbed to a new high of N77.91 trillion in April, an encouraging signal for the real economy. The figure represents a 2.2 percent increase from N76.27 trillion recorded in March, and a year-on-year rise of almost 7 per cent compared to N72.92 trillion in April 2024. We note with optimism the accelerated growth of the private sector is backed by steady bank lending activity across industries, particularly in manufacturing, trade, agriculture, and telecommunications.
Indeed, the private sector has remained a bright spot in monetary data, despite the Central Bank’s tighter policy stance aimed at curbing inflation and defending the naira.
Private credit volumes had hovered between N73 trillion and N75 trillion for most of mid-2024, before accelerating toward year-end. By December, credit had reached N78.02 trillion the highest point before a brief slowdown in January and February 2025. The April rebound suggests growing confidence among lenders and borrowers, likely supported by improved balance sheets and a more stable policy environment.
Enabling a Job Creating Economy
Nigeria’s unemployment rate has been high, exceeding 33%, with youth unemployment reaching over 40%. A large portion of the labour force works in the informal sector, offering fewer benefits and lower wages. The rate of job creation in the private sector has not kept pace with the growing labour force. To this end, we have reviewed many of the boom and burst cycles that the Nigerian economy is noted for over the years. A major attribution of these cycles are the instances of sudden economic growth which, however, never translated into robust job creation, leading to high unemployment, particularly among youth. This trend is changing. We have observed a shift in the needle that suggests signs of job creation in the economy in 2024, driven by economic growth and sector-specific initiatives.
While challenges remain, particularly regarding youth unemployment, we submit that the services sector has continued to played a significant role in boosting employment. Unemployment decreased from 5.3% in Q1 2024 to 4.3% in Q2 2024, according to National Bureau of Statistics (NBS) report. The expansion of the services sector, including financial services, real estate, and ICT, has become a key driver of job creation and economic activities. Besides, the Federal Government is actively pursuing policies to create more jobs, including a focus on attracting foreign investments.
Global and Domestic Accolades for Economic Restructuring
On the aggregate, we can confidently assert that the Nigerian economy is showing growth. To this end, we join other institutional and individual analysts across the globe that had objectively reviewed the impact of the economic restructuring under the Tinubu’s Federal Administration and had returned a positive verdict.
One of such is the global financial service company, Moody’s Rating, which has upgraded Nigeria’s rating by a notch to ‘B3’ from ‘Caa1,’ citing significant improvements in the country’s external and fiscal positions. The credit rating agency revised Nigeria’s outlook to ‘stable’ from “positive. The rating agency credits the recent overhaul of Nigeria’s foreign exchange management framework for improving the balance of payments and bolstering the CBN’s foreign exchange reserves. It also noted that inflationary risks in Nigeria, driven by policy shifts, have diminished while inflation and domestic borrowing costs are showing nascent signs of easing, bolstering confidence in the stability of the policy changes.
Before Moody’s upgrade of Nigeria’s rating, another global financial service rating company, Fitch Ratings, had upgraded Nigeria’s sovereign credit rating to B with a stable outlook. This upgrade, which occurred on April 11, 2025, reflects increased confidence in the government’s commitment to policy reforms particularly those implemented since June 2023. These reforms include exchange rate liberalization, monetary policy tightening, and steps to end deficit monetization and remove fuel subsidies. According to Fitch, these reforms have improved policy coherence and credibility, reduced economic distortions, and enhanced macroeconomic stability.
The World Bank had always been effusive in commending the economic reforms despite threat of political backlash. In one of its Nigeria Development Update (NDU) report, titled “Building Momentum for Inclusive Growth”, the World Bank noted that the improvements in fiscal conditions were primarily driven by increased federation revenues, which had contributed to the positive economic outlook for the country.
It mentioned that economic growth in the last quarter of 2024 had surged to 4.6 per cent on a year-on-year basis, bringing the full-year growth for 2024 to 3.4 per cent, the highest since 2014, excluding the 2021-2022 COVID-19 rebound. Additionally, the fiscal deficit shrank from 5.4 per cent of Gross Domestic Product (GDP) in 2023 to 3.0 per cent. It surmises that the positive trend was driven by a sharp rise in federation revenues, which increased from N16.8 trillion in 2023 that (7.2 per cent of GDP), to an estimated N31.9 trillion in 2024 (11.5 per cent of GDP).”
The London-based Financial Times newspaper was more declaratory in its review of Nigeria’s economy. In a report, it notes, Nigeria is in better shape than at any time in the past decade just halfway through the first term in office of the Tinubu federal administration. `The report acknowledges that its “verdict may come as a surprise — or even sound like a sick joke — to tens of millions of Nigerians who are suffering the worst cost of living crisis in a generation’’.
Yet, according to the paper:
“President Tinubu has stabilized the economy and laid the groundwork for a broader recovery though most ordinary Nigerians won’t feel that yet. But it is a decent performance when oil prices are weak. The tiny green shoots have come because Tinubu’s government has tackled debilitating structural distortions. On day one Tinubu removed a ruinously expensive fuel subsidy.
More important still, the central bank has restored monetary policy orthodoxy after a shambolic era in which only cronies with access to cheap dollars benefited. After a dangerous overshoot, the naira has stabilized, with the gap between the official and black-market rate shrinking to almost nothing.”
Perhaps, more poignant is the review of the economy by the Managing Director of Coleman Wires and Cables Industries Limited, George Onafowokan, who said that foreign investors are taking bold steps to invest in Nigeria despite the tough economic conditions local players often complain about.
According to him, “From my vantage point as MAN Chairman, I sign off on applications from new companies. I can tell you that many of these are foreign firms setting up in Nigeria. Ironically, it is local businesses that often complain and hesitate.”
While urging Nigerian manufacturers to stop focusing solely on the challenges and begin to explore the country’s untapped potential, Onofowokan declared that there are opportunities to tap into.
For his own part in the trajectory of Nigeria’s reforms, the CBN Governor Olayemi Cardoso was recently conferred with the Central Bank Governor of the Year 2025 African Banker Award by the African Banker. The leading publication dedicated to reporting on the banking industry across the continent says it conferred the CBN Governor with the award because the Bank has had to make tough decisions but these, the organisers noted, have assuaged markets, renewing investor confidence.
These variegated reviews capture in different shades our aggregation of the progressive impact of the federal administration’s reforms on the nation’s economy. To further our adoption of these position, we want to conclude this conference by subscribing to the critical impartation articulated by the Financial Times in its review which notes that:
“As Nigeria’s election cycle edges towards 2027, Tinubu may be tempted to slow the pace of change. That would be a mistake. He should forge ahead, with the overriding aim of making ordinary Nigerians — not just investors — feel the benefits of his shock therapy.”
This is also our stance!
Omoniyi M. Akinsiju PhD
Chairman,
Independent Media and Policy Initiatives(IMPI)
June 10 2025
