Nigeria’s reforms revered by markets become political problem for Tinubu

Nigeria’s benchmark stock index has surged 52% in dollar terms this year, making it the world’s fourth-best performer, but many Nigerians, including newspaper vendor Sulaimon Isiaka, are not feeling the benefits.

The naira has strengthened almost 5% against the greenback since January, and Africa’s largest oil producer’s dollar bonds have returned 4.4%, but food, water, electricity, gas and other fuels and transport costs have soared.

Frustration over President Bola Tinubu’s reforms and spiraling living costs is becoming a political challenge, with many Nigerians, including housekeeper Wudira Talwa, saying they will not vote for Tinubu in the next election.

Seated beneath a large red canvas umbrella outside Nigeria’s main stock exchange in Lagos, Sulaimon Isiaka watches traders, bankers and executives stream past his newspaper stand each day.

 

The 45-year-old vendor spends part of his 12-hour shift delivering bundles of newspapers to the Nigerian Exchange Group next door. Nearby is the Lagos office of the Central Bank of Nigeria and the headquarters of some of the nation’s biggest lenders.

 

Few Nigerians are closer to the heart of the country’s financial revival, spurred by President Bola Tinubu’s economic reforms, than Isiaka. Nigeria’s benchmark stock index has surged 52% in dollar terms this year, making it the world’s fourth-best performer. It is likely to get a further boost from the listing of Dangote Petroleum Refinery and Petrochemicals FZE, which aims to raise as much as $2 billion in Africa’s largest initial public offering.

 

 

The naira has strengthened almost 5% against the greenback since January and Africa’s largest oil producer’s dollar bonds have returned 4.4%, more than double the emerging-market average.

 

Yet for many Nigerians, including Isiaka, those gains are largely passing them by.

“I make about 3,000 naira ($2.18) a day. It is not enough to pay electricity bills, pay children’s school fees, pay rent and buy food for the family,” said the father of two, who estimates his earnings have halved since Tinubu took office three years ago. “Before this government, rent was cheaper, food was cheaper and I was selling more newspapers, so my life was much better.”

 

Frustration over Tinubu’s reforms and spiraling living costs fueled deadly protests in 2024 that were eventually quashed. The government acknowledges more needs to be done to ensure Nigerians feel the benefits.

 

“We are mindful that macroeconomic stability, while necessary, is not sufficient on its own,” Finance Minister Taiwo Oyedele said recently. “Economic growth must be inclusive and must translate into tangible improvements in the welfare of Nigerians.”

 

The disconnect highlights a familiar dilemma that has played out in emerging markets from Argentina to Kenya: reforms applauded by investors often impose steep costs on voters, who must wait years for the benefits to materialize.

 

 

In Nigeria, as in many other countries, that frustration has been compounded by the perception that ordinary people are bearing the cost of reforms even as graft remains entrenched among the political elite.

 

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With campaigning set to begin in earnest next month ahead of Jan. 16 elections, the economic pain inflicted by Tinubu’s policies is becoming a political challenge.

 

For Wudira Talwa, a 25-year-old housekeeper in the capital, Abuja, it has made him more inclined to back former Anambra State Governor Peter Obi.

 

“I honestly don’t see myself voting for Tinubu next year,” Talwa, said. “Since he came in, the price of everything has gone up. Let’s give Obi a chance and see if he will be better.”

 

Reform Dividends

More than three years into Tinubu’s presidency, investors are seeing a country that finally appears to be breaking with decades of economic distortions.

 

The government removed a costly petrol subsidy, liberalised the foreign-exchange market and introduced electricity tariffs designed to reduce chronic losses in the power sector.

 

The changes have improved public finances and restored confidence among foreign investors.

 

“If we take a step back, Nigeria had historically faced extended periods of poor FX liquidity which made it difficult to invest in the country,” Samir Gadio, head of Africa strategy at Standard Chartered Plc, said. “This seems now a thing of the past.”

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The reforms, attractive yields and improved foreign-exchange convertibility have revived interest in Nigerian assets, he said.

 

 

The timing has also helped.

 

Higher oil prices stoked by the Iran war have boosted government coffers, while billionaire Aliko Dangote’s 700,000-barrel-a-day refinery has reduced some of Nigeria’s dependence on imported fuel and eased demand for dollars.

 

Ratings agencies have taken notice. S&P Global Ratings recently upgraded Nigeria for the first time since 2012. The country’s foreign reserves have improved dramatically to almost $52 billion compared with $35 billion when Tinubu started his term, according to central bank data.

 

Reforms Versus Reality

But the same policies celebrated in financial markets have done little to improve security or household budgets.

 

 

The absence of sustained single-digit inflation and economic growth of 8% to 10% since former President Muhammadu Buhari’s damaging economic policies, combined with a halving of gross domestic product per capita since 2014, means Tinubu’s recent stabilization reforms “have yet to deliver the tangible growth needed to improve citizens’ lives amid a growing population,” Joachim MacEbong, senior analyst at Control Risks, said.

 

 

Kidnapping, banditry and localized insurgencies continue to plague large parts of the country, particularly in the north, disrupting farming, trade and transport. Nearly two-thirds of Nigerians live below the poverty line, while 27 million people faced acute food insecurity in late 2025, according to the International Monetary Fund.

 

Food, water, electricity, gas and other fuels and transport costs have soared 64%, 63% and 58%, respectively, since January 2024 — the earliest comparable period available after Nigeria’s statistics agency revised its inflation methodology.

 

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The surging prices have forced many like Abubakar Sani to scale back. The 46-year-old Kano resident once kept two cylinders of cooking gas at home, with one serving as a backup. As prices climbed, he cut back to one, then switched to charcoal. . At times, even charcoal has been beyond his reach.

 

“We are in a difficult situation that needs urgent government intervention,” said Sani, who supports a wife and four children.

 

Electricity has also become a potent political issue. During the 2023 election campaign, Tinubu pledged to fix Nigeria’s chronic power shortages and lower costs, telling voters not to support him again if he failed.

 

“The current poor supply has already determined how I will vote,” said Abayomi Michael, a 53-year-old Lagos-based architect and IT consultant. “He promised and the needle didn’t even move, despite higher tariffs. Fail.”

 

 

Nigeria has the world’s largest population without access to electricity, with about 87 million people lacking power, according to World Bank data. For millions more, supply remains unreliable and inadequate.

 

Voter Sentiment

For Feyintola Olaleye, a 55-year-old drinks seller in Ibadan, having reliable and affordable electricity is the difference between profit and loss.

 

Her shop relies on refrigeration to keep drinks cold. Grid power was already unreliable, but outages worsened last year. The solar-powered system she installed eventually failed under the strain. By the time she bought a generator, fuel prices had surged.

 

Operating costs rose more than 40% in the first quarter, largely because of fuel expenses fanned by supply constraints caused by the Iran war.

 

“I will vote for anybody whose single agenda is to tackle electricity,” she said. Politicians who promise to fix everything usually end up solving nothing, she added.

 

Frustrations over reforms are also showing up in political sentiment.

 

A survey of 829 people conducted by SBM Intelligence last month across all six of Nigeria’s geopolitical zones found Tinubu’s net favorability rating at minus 58.5%, compared with minus 31.8% for rival Atiku Abubakar and 58.3% for Obi. Only 11% of respondents said Nigeria is moving in the right direction.

 

 

“Insecurity and terrorism are the top concerns for 45% of respondents, while another third see the economy and insecurity as a single crisis,” Ikemesit Effiong, the firm’s head of research, said. “That is not a robust platform for reelection.”

 

Whether Abubakar and Obi can capitalize on the polling is an open question.

 

“The polling shows there is definitely a constituency on which the opposition can build a winning campaign,” MacEbong said. “However, they must quickly get themselves organized across all 36 states and craft a winning message around insecurity and cost of living in order to activate that constituency and get them to the polls.”

 

Opposition figures have started framing the election around the gap between economic indicators and lived reality.

 

“Nigerians have seen more rhetoric than results,” said Phrank Shaibu, a spokesman for former Vice President Abubakar, who has run for president six times. “Power supply remains erratic, tariffs have gone up, and millions of Nigerians are paying more for less.”

 

The presidency rejects suggestions that the reforms have had no positive impact on Nigerians’ lives.

 

Oyedele has noted that per capita income grew by nearly 10% last year indicating a marked reduction in poverty levels and Temitope Ajayi, a presidential spokesperson, said Tinubu’s administration has made progress on electricity supply.

 

 

“Tinubu is working very hard to deliver on his promise and commitment to Nigerians on stable electricity supply,” Ajayi said.

 

The administration has spent the past three years tackling structural problems in the power sector, including debts owed to generation companies and gas suppliers, metering gaps and weak transmission infrastructure, he said. “This remaining one year of the first term will consolidate all the initiatives and investments in the power sector.”

 

Politically, however, the challenge may no longer be if reforms are economically necessary, but whether Nigerians still believe the hardship will eventually pay off, Effiong said.

 

“The shift from viewing subsidy removal and energy shocks as reform to seeing them as mismanagement tends to happen when households stop expecting future benefits.”