When President Bola Ahmed Tinubu took office on May 29, 2023, he took a different approach to governance. Two major decisions that attracted significant criticism were the removal of the fuel subsidy and the floating of the Naira. These policies were widely seen as anti-people, as they led to significant economic hardship for many Nigerians. However, the government consistently acknowledged the difficulties faced by the populace and assured them that these measures were short-term sacrifices necessary to revive the Nigerian economy, which had been in comatose for years.
Given the failures of previous administrations, many Nigerians were skeptical about the sincerity and effectiveness of the current government's economic reforms. Indeed, 2024 proved to be a tough year for many, with rising costs making it harder for citizens to meet their basic needs. Yet, the government showed sensitivity to the challenges, providing palliative measures such as foodstuffs, CNG buses, and conversion kits, as well as increasing the national minimum wage from N18000 to N70000, with state governments following suit with varying rates.
As I mentioned last year, the economic reforms implemented by the government are grounded in proven economic theories that promote market efficiency and the optimal use of resources. The government deserves commendation for not backing down despite public outcry. These reforms have freed up resources that the government can now invest in critical sectors, which in turn fosters economic growth and national development and the country's ability to address security challenges.
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Last year, I projected that Nigeria would experience significant economic improvement in 2025, with the Naira gaining value and the price of PMS (Premium Motor Spirit, or fuel) dropping, leading to a ripple effect on the prices of goods and services. Although it is only March 2025, early signs indicate my projection is becoming a reality. According to the National Bureau of Statistics, headline inflation dropped to 24.48% in January 2025 from 34.8% in December 2024. It is important to note that the January inflation rate was calculated using the rebased Consumer Price Index (CPI). Beyond the numbers, the Naira now exchanges for about 1,500 Naira to the US dollar, and PMS sells for under 1,000 Naira. More importantly, food prices--the primary driver of Nigeria's headline inflation--are beginning to drop, bringing hope and excitement to citizens.
Critics of the economic reforms are gradually being proven wrong, and some have even reversed their stance to support government policies. Therefore, Nigerians should continue to be patient, as things are expected to improve further. The Naira is anticipated to appreciate even more, and inflation to decrease. The government should remain committed to its reforms and continue engaging with Nigerians to ensure they understand government policies and their benefits.
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Kenechukwu Aguolu FCA, PMP, CBAP
