Nigerians continue to groan as FG’s efforts to revamp economy totters

…Palliatives, increased minimum wage, public transport interventions fail to bring succour

…There is hope, we are not even at half-time yet – Tinubu insists

Nearly two years into President Bola Ahmed Tinubu’s administration, Nigeria’s economic landscape remains volatile. His administration’s ambitious reforms, most notably the removal of fuel subsidies and the unification of the exchange rate, were designed to set the country on a path to sustainable growth. However, in the short term, these policies have triggered widespread economic distress, with millions struggling under soaring costs of living.

With less than a year before political activities for the 2027 election intensify, a pressing question looms: Will these reforms provide tangible relief before then, or must Nigerians brace for continued hardship?

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A nation in economic turmoil

In his inauguration speech, Tinubu announced the end of Nigeria’s long-standing fuel subsidy, a policy that had been draining trillions of naira from government coffers. The goal was to free up funds for infrastructure and social programmes. However, the immediate impact was severe, fuel prices tripled, transportation costs soared, and inflation accelerated, significantly eroding the purchasing power of ordinary Nigerians.

Another major reform was the unification of Nigeria’s multiple exchange rates. The government argued that allowing the naira to float freely would attract foreign investment and curb forex market distortions. However, the unintended consequence was a sharp naira devaluation, which fueled inflation and drove up the cost of imported goods, including essentials like food and medicine.

Despite efforts by the Central Bank of Nigeria (CBN) to inject forex liquidity and stabilise the naira, volatility persists. While the currency has seen some gains recently, it still trades at around N1,590 per dollar in the parallel market.

Meanwhile, the National Bureau of Statistics (NBS) reported that inflation dropped to 24.48% in January, down from 34.80% in December 2024, due to the rebasing of the inflation basket. Yet, for many Nigerians, economic hardship remains unchanged.

Ibrahim Olakunle, a Lagos-based trader, expressed his frustration: “My major concern is the exchange rate. The value of the naira against the dollar has made importation difficult for us. If we could get 1000/$, it would help a lot, but the government seems unbothered, and the next election is fast approaching.”

The World Bank projected in late 2024 that over 129 million Nigerians now live below the poverty line, while the Economist Intelligence Unit (EIU) warned that Nigeria could rank among the most challenging places to live in the next five years due to economic instability, insecurity, and governance issues.

To mitigate the crisis, the government rolled out palliatives, increased minimum wage for civil servants, public transport interventions, and import waivers on select food items. However, many Nigerians argue that these measures have done little to alleviate daily struggles.

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BusinessDay findings indicate that while the prices of some food items have declined, the reductions are marginal compared to the previous inflation spike.

For instance, a 50kg bag of foreign rice, which soared from N50,000 to over N100,000 in 2024, is now selling between N80,000 and N90,000—a drop that many say is barely noticeable in everyday expenses.

“Yes, some food prices have come down,” said Olawale Adenike, a Lagos-based worker. “But transportation, electricity, and rent are still extremely high. I don’t think the government is doing enough to solve these issues.”

Despite growing public frustration, the government insists that its policies are yielding positive results.

“There is hope; investors are coming in, and they are saying good things about Nigeria. I am very proud of that,” Tinubu said in Abuja while addressing the Catholic Bishops’ Conference of Nigeria (CBCN) on Friday. “What seemed like a difficult beginning is now showing promise. And we are not even at half-time yet.”

Economic experts also acknowledge some improvements. Adeola Adenikinju, president of the Nigerian Economic Society, noted that Nigeria is beginning to recover from recent economic shocks, citing exchange rate stability, energy price adjustments, and declining food costs as signs of progress.

He credited government policies for these gains but warned that external risks, such as fluctuations in global oil prices, could still pose challenges.

“We have turned the corner in terms of development,” he said while addressing journalists at the Lagos Economic Development Update last week. “But we must remain mindful of external factors that could affect economic stability.”