NEARLY two years since President Bola Ahmed Tinubu assumed office and introduced a raft of ambitious economic reforms, a sobering picture is emerging: while international institutions applaud the administration’s bold moves, millions of Nigerians continue to bear the brunt of their consequences.
The International Monetary Fund (IMF), in a statement issued on Friday, commended the Federal Government for what it called “important steps to stabilise the economy, enhance resilience, and support growth.”
However, it acknowledged that these reforms have yet to translate into tangible benefits for the average Nigerian.
“Gains have yet to benefit all Nigerians, as poverty and food insecurity remain high,” wrote Axel Schimmelpfennig, IMF Mission Chief for Nigeria, following an Article IV consultation—routine discussions held with member countries.
President Tinubu’s economic policy overhaul—launched shortly after his inauguration in May 2023—includes ending decades-long fuel subsidies, liberalising the foreign exchange regime, and halting Central Bank financing of fiscal deficits. These decisions were widely regarded by multilateral institutions as necessary corrections for a nation grappling with chronic revenue shortfalls and spiralling debt.
Yet these same reforms have sparked the most acute cost-of-living crisis Nigeria has faced in a generation.
According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate eased to 23.18 percent in February 2025, marking a decline from 24.48 percent recorded in January. This moderation came on the heels of a significant rebasing of the Consumer Price Index (CPI), which adjusted the base year from 2009 to 2024 to better reflect current consumption trends.
Food inflation, a major contributor to overall inflation, also declined notably to 23.51 percent in February, down from 26.08 percent in the previous month. This represents a marked improvement from the 37.92 percent food inflation rate recorded in February 2024, a period when Nigerians were grappling with the peak impact of subsidy removal and naira devaluation.
However, the trend did not persist. By March 2025, headline inflation had inched back up to 24.23 percent, according to the latest NBS figures, though food inflation further declined to 21.79 percent. Despite this apparent easing, inflationary pressures continue to affect household budgets, with staple foods such as rice, yam, and garri still selling at two to three times their 2022 prices in many markets.
The NBS noted that transportation, housing, and utilities—alongside food—remain key drivers of persistent inflation, especially in urban centres where imported inflation and energy costs have not abated.
Transport costs have also skyrocketed, as petrol prices surged from around N185 per litre to over N1000 per litre in the aftermath of subsidy removal. For many Nigerians, commuting to work or school has become unsustainable.
The World Bank, in its latest Nigeria Development Update published in October 2024, more than 129 million Nigerians—over half of the country’s estimated 216 million population are now living in poverty.
The report, titled “Staying the Course: Progress Amid Pressing Challenges”, attributes the surge in poverty to sustained high inflation, weak employment growth, and the disruptive effects of recent economic reforms, including the removal of fuel subsidies and the liberalisation of the foreign exchange market. Although the Bank acknowledged that inflation had begun to ease slightly standing at 32.7% year-on-year as of September 2024 it warned that rising prices continued to erode household purchasing power.
While the government has launched targeted cash transfer programmes to cushion the impact, the World Bank urged a faster and broader implementation to reach vulnerable populations.
While Tinubu’s policies have technically addressed macroeconomic distortions like overvalued currency and unsustainable fuel subsidies—they have simultaneously triggered price instability and intensified hardship for low- and middle-income households.
A November 2024 report by SBM Intelligence titled “Starving and Stunted” revealed that a growing number of Nigerian households are grappling with severe food insecurity. According to the report, the percentage of households unable to afford sufficient food rose from 37% in 2019 to 62.4% in 2023, underscoring the economic hardship triggered by inflation and weakening household incomes.
The report further noted that 12.3% of respondents had gone an entire day without eating, while a significant proportion had been forced to reduce meal portions or eliminate protein sources from their diets altogether, due to rising food prices. Protein-rich foods experienced the highest price surges among the five major food categories monitored.
“Protein is the most expensive food group and therefore the easiest to eliminate when household budgets are tight,” the report stated.
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The data paints a grim picture of nutritional quality in many Nigerian homes and amplifies concerns over the widening cost-of-living crisis.
The IMF’s latest assessment admits that while fiscal and monetary measures are beginning to show signs of stabilisation—such as a narrowing exchange rate gap and improved external reserves—the economic benefits have not filtered down to most citizens.
“The outlook is marked by significant uncertainty,” Schimmelpfennig cautioned, citing global geopolitical tensions and falling crude oil prices as external risks. He also warned that Nigeria remains vulnerable to shocks unless it builds resilience through improved revenue collection and targeted social support.
Despite being Africa’s largest oil producer, Nigeria continues to struggle with maximising oil revenue due to persistent underproduction and structural inefficiencies. As of March 2025, Nigeria’s crude oil output stood at 1.4 million barrels per day (bpd), significantly below the 2.06 million bpd benchmark set in the 2025 national budget. This represents a continuous shortfall, following a February 2025 average of 1.465 million bpd, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The country’s inability to meet its OPEC quota of 1.5 million bpd is largely attributed to ageing infrastructure, pipeline vandalism, and crude oil theft—longstanding issues that have plagued the sector for years. These challenges continue to undermine government efforts to boost foreign exchange reserves and fund critical infrastructure.
Compounding the problem is Nigeria’s chronically low tax-to-GDP ratio. According to the OECD’s 2024 Revenue Statistics in Africa report, Nigeria’s tax-to-GDP ratio was just 7.9% in 2022, far below the continental average of 16.0%. This severely limits the government’s ability to finance social welfare programmes and cushion citizens against the adverse effects of recent economic reforms, including fuel subsidy removal and currency devaluation.
Efforts are underway to broaden the tax base and improve compliance, but analysts warn that without meaningful structural reforms and stronger revenue administration, Nigeria’s fiscal capacity will remain constrained.
While international creditors and investors view Tinubu’s reforms as necessary medicine for Nigeria’s ailing economy, the human cost continues to mount. Citizens are forced to navigate daily realities marked by higher prices, stagnant wages, and dwindling purchasing power.
As 2025 progresses, questions linger: how long will it take for the promised economic rebound to materialise? And more critically, how many Nigerians can endure the wait?
