THE EMERGING GAINS OF A PAINFUL REFORM

Even though much remains to be done,  the Tinubu reforms are beginning to yield dividends, reckons ADEMOLA ADEDOYIN 

For the tenth consecutive month, Nigeria recorded inflation moderation in January, with headline inflation easing to 15.10 percent, down from 15.15 percent in December 2025.

Most significantly, and most cheering in the latest inflationary trends report by the National Bureau of Statistics (NBS), is the disclosure that—for the first time in over a decade—food inflation fell sharply into single digits, declining to 8.8 percent in the month under review.

While this is not yet Eldorado, economists agree that a consistent month-on-month decline in headline inflation is a strong indication that price pressures are easing and, in some cases, beginning to reverse. This marks a positive development after years of entrenched high inflation.

More importantly, the reduction of food inflation to single digits is particularly beneficial to low- and middle-income households, which devote a disproportionately large share of their income to food.

If these trends are sustained—as development experts and policy analysts predict—Nigeria may be said to have truly turned a corner, setting course for an era of recovery and eventual prosperity after years of economic meltdown and the unavoidable reform agenda of the present administration.

From inception, Bola Ahmed Tinubu made it clear that his administration’s economic reforms would rest on two core pillars: fuel subsidy removal and foreign exchange unification. Economic watchers were therefore left in no doubt that the country was headed for a turbulent transition. The President was equally under no illusion about the immediate hardships these reforms would impose, but saw little alternative if the trajectory of economic stagnation was to be reversed.

That the Tinubu administration inherited an economy on the brink of ruination is hardly debatable. By May 2023, public debt stood at ₦87.4 trillion, with a debt service-to-revenue ratio exceeding 100 percent, meaning the government was borrowing largely to service existing debts. Annual budget deficits averaged between ₦4 trillion and ₦11 trillion from 2016 to 2023; fuel subsidy payments exceeded ₦10 trillion in eight years; the foreign exchange regime operated through at least five windows, fostering arbitrage and rent-seeking; and foreign reserves had declined to about $34 billion.

Confronted with these grim statistics, it became clear that decisive economic surgery was inevitable to resuscitate an economy that was almost fatally wounded. That was the path the Tinubu administration chose.

As with all surgeries—medical or metaphorical—the revival process came with acute pain, prompting doubts about whether the “patient” would survive the operating theatre.

The immediate aftermath was bleak: fuel prices surged by nearly 200 percent, rising from about ₦185 per litre to between ₦500 and ₦700; transportation costs spiked; the naira depreciated sharply; and inflation accelerated into the high-20s and low-30s, with food inflation worsening. Poverty deepened, social tensions escalated, and public protests followed.

Throughout this turbulent phase, one constant remained: despite efforts to cushion the impact through palliatives, the government stayed focused on the long-term objectives of the reforms.

Nearly three years on, the reforms are beginning to yield tangible dividends, even though much remains to be done.

A standout area of progress is the oil and gas upstream sector. Under the previous administration, crude oil theft and pipeline vandalism drastically curtailed production, with output falling below 1 million barrels per day by 2022, far below Nigeria’s nominal capacity of 1.5–2 million barrels per day.

The Tinubu government adopted a firm, front-footed approach against crude oil theft and production sabotage. As a result, crude oil output has recovered, rising close to—and at times exceeding—Nigeria’s OPEC quota of 1.5 million barrels per day.

Combined with fiscal and monetary reforms, this production rebound has driven a sharp increase in foreign reserves, which climbed to about $49 billion by February 5, 2026. This improvement has been fueled by higher oil export receipts, increased remittances, reforms in the foreign exchange market, and a steep reduction in fuel importation.

The deregulation of the downstream oil sector and removal of fuel subsidy—painful at inception—are now yielding substantial returns. Experts estimate annual savings of about $7.5 billion, previously expended on fuel subsidies, now available for infrastructure and social investment at federal and sub-national levels.

States and local governments are correspondingly better funded, ending widespread salary arrears and enabling accelerated infrastructure development in many states, though some continue to attract criticism for underperformance despite higher allocations.

The Federal Government has also recorded gains by supporting the Dangote Refinery (650,000 bpd), significantly reducing petrol imports. Daily imports declined from about 44.6 million litres in 2024 to roughly 14.7 million litres by April 2025—a 67 percent drop. Petrol import bills fell by 54 percent in Q1 2025 compared to Q1 2024, from $2.6 billion to $1.2 billion.

These developments have boosted external reserves, eased pressure on the foreign exchange market, and contributed to naira stability.

Foreign exchange unification has further strengthened confidence. The market-determined exchange rate regime has attracted estimated foreign capital inflows of about $21 billion within ten months, underscoring renewed investor confidence. Nigeria also posted a $10.83 billion trade surplus in the first nine months of 2025, its first in years.

Growth indicators reinforce this positive outlook. GDP growth reached 3.8 percent in Q4 2024, the highest in three years, and accelerated to 4.23 percent in Q2 2025, the fastest in four years. The debt service-to-revenue ratio has also improved markedly, falling from nearly 100 percent to about 50 percent.

The critical question remains: how do these macro-level gains translate to the lived experience of ordinary Nigerians?

In all, Nigerians are in agreement that President Tinubu assumed office at a moment when Nigeria stood at a defining crossroads, beset by surging inflation, acute foreign exchange pressures, declining oil production, and a widening deficit of confidence in the nation’s monetary and fiscal direction. Confronted with these realities, his administration embarked on far-reaching reforms that, though undeniably painful in the short term, are beginning to yield measurable dividends. 

Today, inflation is easing, macroeconomic stability is gradually returning, foreign exchange constraints are softening visibly, and Nigeria is regaining credibility among international financial institutions and global investors.

Beyond the immediate indicators, the government is laying the groundwork for a more resilient, digitally enabled, and globally competitive economy ; one positioned to unlock broader opportunity in the years ahead.

No question, much remains to be done, and the journey is far from complete. Yet, step by step, Nigerians are beginning to see that relief is filtering through, that the initial pains at the onset of the reform is yielding way to much progress and that prosperity may just be around the corner if the current momentum is sustained.

 Adedoyin, fnipr, Award Winning Journalist, Communication Consultant and PR Practitioner, writes from Lagos