The popular saying, "The morning foretells the evening," seems to defy logic in Nigeria's case. The economy, which turned frosty after President Bola Tinubu introduced radical reforms 18 months ago, now appears to be thawing rather than worsening, contrary to the predictions of critics.
Rather than witnessing a continued decline in living standards, as many feared, Nigeria seems to be gradually recovering from decades of stagnation. The current glimmers of hope--despite the widespread discontent initially caused by Tinubu's reforms, such as the removal of petrol subsidies and the unification of multiple foreign exchange rates, which led to a sharp naira devaluation--suggest that the hardships Nigerians endured may finally be easing.
The steady improvement in the economy, driven by the president's Renewed Hope agenda, appears to validate the Machiavellian notion that "the end justifies the means." That is because the once-frozen economy, disrupted by these difficult but necessary reforms, is now showing signs of recovery.
This progress may also reflect Nigerians' gradual acceptance of the transition from a subsidy-dependent consumption economy to a production-based one. The assertion above is validated by the fact that by plugging longstanding financial leakages and laying the foundation for harnessing untapped economic potential, the administration is driving a paradigm shift that promises to benefit Nigeria in the long term.
What the above scenario indicates is that, the Renewed Hope agenda, though painful in the short term, seems to be yielding lasting benefits as Nigerians adjust to the adage "no pain, no gain," and the criticisms that resulted in branding Tinubu as "T-Pain" early in his administration are waning. In fact, increasingly, people are beginning to appreciate the broader vision behind President Tinubu's policies and their potential to serve the majority's interests over time.
This shift in public perception is evident in the stabilizing sociopolitical and economic landscape. For instance, the naira-to-dollar exchange rate, which had reached a staggering N1,750/$1, has improved to roughly N1,600-N1,650/$1. This movement is closing in on the N1,500/$1 target set by Tinubu in the 2025 appropriation bill presented to the National Assembly on December 15.
What makes these positive developments even more noteworthy is that they are happening less than 18 months into Tinubu's presidency. While many anti-Tinubu politicians and citizens clamored for immediate results from his reforms barely a year into office, advocacy from some of us and the voices of the likes of Nobel Laureate Prof. Wole Soyinka, who called for patience and endured criticism as government sympathizers, have been vindicated.
Clearly, the early signs of recovery are evidence of the principle that reform outcomes require time to reach fruition. Hence in less than two years--often considered a reasonable benchmark for policy impact--Nigeria's economic indicators are shifting. Like traffic lights, these signals are moving from red to amber, with the potential to turn green as Tinubu approaches his second year in office in May 2025.
Positive Socioeconomic Developments Indicate Progress Despite Initial Hardship
Recent socioeconomic improvements in Nigeria highlight the impact of a series of bold policy actions that hold significant potential to alleviate the hardships many Nigerians have endured due to reform-induced challenges. These developments, signaling economic recovery, include:
·Reduction in pump prices for petrol and diesel.
·Strengthening of the naira against foreign currencies.
·Decline in religious insurgency and banditry.
·Decrease in herder-farmer clashes and overall insecurity.
·Significant reduction in crude oil theft, coupled with increased oil production and exports, boosting foreign exchange reserves.
·A rise in foreign direct investment, exemplified by Shell's commitment to invest $5 billion in the Bonga deep-sea oil asset.
·Introduction of a N70,000 minimum wage for federal civil servants.
·Adoption of compressed natural gas (CNG) as a less expensive alternative to petrol and diesel for mass transportation.
·Establishment of the Nigerian Education Loan Fund (NELFUND) to enable indigent Nigerians to pursue higher education by covering tuition fees and living expenses, thereby democratizing access to education.
These positive indicators reflect President Tinubu's commitment to managing Nigeria's complex economy, which often defies conventional economic principles. However, it is important to acknowledge the significant sacrifices Nigerians have endured since the administration began implementing its reform agenda on May 29, 2023.
One of the most recent developments that offers hope is the announcement on December 18, 2024, of a N200 reduction in the price of diesel by Dangote Refinery, lowering the cost from N1,200 to N1,000 per liter. Similarly, last month, the refinery reduced the price of petrol (PMS) by N20 per liter.
Given the critical role of petrol and diesel in facilitating transportation, powering factories, and supplying electricity to homes and businesses, these price reductions are expected to positively impact the economy. While the immediate effects of these reductions are not yet apparent--evidenced by the latest Nigerian Bureau of Statistics (NBS) report showing inflation rising from 33.88% to 34.60%--their long-term benefits are anticipated to ease the economic burden on Nigerians.
In essence, while the price reductions in these essential commodities (PMS and AGO) are yet to fully translate into tangible benefits, they are expected to lower transportation costs and provide relief to Nigerians struggling under severe economic hardship. However, these benefits may take time to materialize, as some fuel stations have yet to adjust their prices to reflect the reductions announced by Dangote Refinery.
Once the price adjustments are fully implemented, subsequent NBS reports may capture a downward trend in inflation rates. For now, food inflation remains high, driven by rising prices of staples such as onions, tomatoes, and peppers. These increases can be attributed to seasonal demand during the festive season, high transportation costs due to fuel price hikes, and other supply chain disruptions.
While these developments indicate progress, more time is needed for the full benefits of Tinubu's reforms to materialize. Nevertheless, they offer hope for greater economic stability and relief for Nigerians in the near future.
Tinubu's Economic and Sociopolitical Strategies Show Promise Amid Challenges
Key drivers of Nigeria's current high food inflation include rising transportation costs, seasonal demand, and supply chain disruptions, which have made basic cooking ingredients unaffordable for many vulnerable Nigerians. However, as the reduced costs of petrol and diesel take effect, and with the festive season coming to an end, coupled with continued security improvements, inflation may see a significant drop by the first quarter of 2025. While it may not reach the 15% target set by the Director of Budget in the Presidency, my good friend Dr. Tanimu Yakubu, the concerted efforts of various government departments--from the Central Bank of Nigeria (CBN) to the Ministry of Finance--make it unlikely to remain at its current elevated levels.
Notably, Nigeria's debt service ratio has dropped to 65%, down from 97% when President Tinubu assumed office 18 months ago, just as the globetroting allegations against President has been vitiated by the fact that lndian Prime minister Naranda Modi and German president Frank-Walter Steinmeier have reciprocated Tinubu's visits.
These are heads of strategic countries that are major trading and technology partners and they were in Nigeria to discuss partnerships that would benefit our nation tremendously.
That said, some analysts have suggested wrongly or rightly that Dangote Refinery's recent price cuts for petroleum products may be part of a competitive strategy against importers. Nonetheless, businesses with significant investments--such as Dangote, which staked $20 billion in a state-of-the-art refinery--often start by charging high prices to recoup their investments. Similar trends were observed in Nigeria's telecommunications sector, where companies spent heavily on cutting-edge technology and spectrum licenses, making SIM cards initially expensive before prices dropped significantly. With additional refineries, such as the NNPC facilities in Port Harcourt, Warri, and Kaduna, gradually resuming operations, fuel prices are expected to decline further, aligning with earlier assurances that l gave to the public that although in Nigeria we believe what goes up hardly comes down, petroleum prices will surely come down from their current high.
As we all can attest , efforts to stabilize the naira against foreign currencies have also gained traction. A bill to prohibit the use of foreign currencies for local transactions, such as school fees and rent, has advanced significantly in the National Assembly. Combined with increased local refining capacity of petroleum products, this measure is expected to reduce domestic demand for foreign exchange which hitherto channeled into fuel imports.
Notably, the CBN reported an increase in foreign reserves from $38.3 billion in September to $40.08 billion by November 7, 2024. This boost, the highest in two years, provides sufficient coverage for nine months of imports and supports further currency stabilization.
Overall, President Tinubu's bold economic policies, such as subsidy removal and currency devaluation, have spurred these positive changes. Despite the immediate hardships, these reforms are beginning to yield results, with further momentum anticipated from recently proposed tax reform bills currently under review in the National Assembly. These initiatives suggest a comprehensive approach to economic reform, unlike past efforts, such as the introduction of Structural Adjustment Program (SAP) in mid 1980s under Gen. Ibrahim Babangida, which adopted a piecemeal approach.
If the current reforms are managed effectively, these policies that l had coined "Tinubunomics" but did not go down well Aso Rock Villa, could provide long-term relief for Nigerians. The concept of "Tinubunomics" was a focus when Tinubu's economic policies were reviewed on 8th May during the launch of my book, Leading From the Streets: Media Interventions by a Public Intellectual, 1999-2019. At the event, the theme "Tinubunomics: What's Working, What's Not, and Why" was explored and it generated a heated panel discussion. One panelist vexatiously claimed the economy was in "the red," and the statement went viral. Today, it is unlikely that the same claim would be made, as the unfolding effects of the reform measures indicate long-term potential for recovery and relief.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
On the sociocultural front, Tinubu has taken steps to address allegations of marginalization and promote inclusivity. For instance, renaming the National Arts Theatre after Professor Wole Soyinka which drew critism with those against it alledging nepotism and the naming of University of Abuja after General Yakubu Gowon, an Angas man from north central Nigeria zone underscores a commitment to equity and merit. Similarly, the appointment of Sylvester Nwakuche, an Igbo man, as Acting Controller General of Immigration highlights Tinubu's efforts to correct perceived ethnic imbalances in federal appointments.
In addition to that, the recent release of some Igbo youths detained for IPOB-related offenses signals a thawing relationship between the federal government and Biafran agitators.
To further cement national unity, Tinubu could consider releasing IPOB leader Nnamdi Kanu as a gesture of goodwill during the yuletide season. Such a move could resonate with the Igbo community, much like Muhammadu Buhari's posthumous honor for MKO Abiola in 2018 by changing democracy day from 29 May to 12 June the day the presidential election was presumably won by MKO Abiola but was annuled by the military, won acclaim from the Yoruba people.
Looking ahead, 2025 holds promise for economic recovery and sociopolitical stability, provided Tinubu remains committed to his reform agenda and he woos and receives more support from a broader spectrum of Nigerians. Frankly, as the nation navigates these challenging times, there is hope that brighter days lie ahead.
On that note of optimism, I wish Nigerians and readers worldwide a Merry Christmas and a prosperous New Year.
·Magnus Onyibe is an entrepreneur, public policy analyst, author, democracy advocate, development strategist, alumnus of the Fletcher School of Law and Diplomacy at Tufts University, Massachusetts, USA, and a former commissioner in the Delta State government (2003-2007).
For further discussions, please visit www.magnum.ng.
