Last week, I laid out the context preceding May 29, 2023, and summarised the evolution of policy concerning Nigeria’s downstream petroleum sector and exchange rate management until the advent of President Tinubu. The point of the narrative was to demonstrate that our petroleum subsidy and exchange rate challenges were long-term problems that several Nigerian leaders had shirked until Tinubu courageously and correctly resolved. The other point of the narrative is to posit that it is a major achievement that the government has restored macroeconomic stability after those major reforms in barely two years. This cannot be taken for granted. Macroeconomic reforms in other climes and indeed even here in Nigeria have taken longer to bear fruit.
President Olusegun Obasanjo’s first term was basically directed towards political consolidation. His many travels in an attempt to invite Foreign Direct Investment bore little fruit, and the only significant economic reform was the telecommunications sector deregulation and digital mobile licence auction in 2001, which boosted GDP growth. It was only in the second term that major reforms led to the Paris Club debt write-off and an upsurge of FDI.
Nigeria’s former finance minister, Dr Ngozi Okonjo-Iweala, and Mr Wale Edun’s predecessor as Coordinating Minister of the Economy, who has worked at the World Bank and International Monetary Fund and currently serves as the director general at the World Trade Organisation as well as Prof. Chukwuma Soludo, who served as chief economic adviser and later CBN governor, both of whom I often celebrated on my then-Businessday column, should know a thing or two about macroeconomic reforms. Both have made the point this column makes – that the economic reforms of the Tinubu administration are appropriate, sensible and required, and macroeconomic stability has been substantially achieved, even though there are policy challenges still outstanding.
What is the evidence of macro stability? Today, the dollar trades at N1,555/$ on the streets, essentially similar to the rates in the formal market, and stable since January 2025. Indeed, we closed 2024 with FX rates around N1,700/$. The nation’s net foreign reserves, which had plunged to around $3bn under President Buhari, had been boosted above $20bn. Our gross foreign reserves are over $40bn, the result of prudent, sensible and orthodox exchange rate and monetary policy management at the CBN. Confidence in CBN’s policy stances and institutional integrity, which had been badly dented under Emefiele, has been restored. The National Bureau of Statistics has taken the appropriate action of rebasing both our consumer price index and gross domestic product computations to current data, also increasing the accuracy and reliability of inflation and output data.
Inflation has declined due to both methodological and substantive factors to 21.88 per cent, still high but substantially better than the peak inflation approaching 40 per cent. While our GDP in global comparisons has suffered from naira devaluation, rebasing has restored over 30 per cent of what we lost. GDP growth reached 3.84 per cent in Q4, 2024, under the old GDP computation, and was 3.13 per cent in Q1, 2025, under the rebased computation.
Reforms are also proceeding on the revenue front. The President’s tax reforms, led by the Executive Chairman of the Federal Inland Revenue Service, Zach Adedeji and the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, have resulted in four new, transformational tax acts that promise to revolutionise tax collection, increase tax revenue and yet are pro-poor with tax exemptions for relatively poor persons and low-income businesses and VAT exemptions on essential food and other items. On the trade front, Nigeria is recording significant and consistent trade surpluses. As of Q1, 2025, trade data released by the NBS showed total exports of N20,598.48bn against total imports of N15,426.17bn, resulting in a positive trade balance of N5,172.31bn.
We are also seeing a radical transformation in road and aviation infrastructure with important projects, such as the Lagos-Calabar Highway and the Sokoto-Badagry Expressway. Both projects have their critics, but I am not one of them! I am convinced that the economic impact of both will be transformational.
Even if you choose to exclude these high-impact highways from consideration, President Tinubu and his works minister, David Umahi, are leading the construction and rehabilitation of important road projects in every region of the country. I have seen people who oppose everything this government has done, including, to my shock and dismay, even NELFUND, which is providing convenient funding for tertiary education for poor Nigerians. Fortunately, evidently from the videos we are seeing from universities across Nigeria, the beneficiaries of these NELFUND loans are not complaining! Initiatives to improve credit availability for Nigerian consumers are also advancing with the creation of CREDITCORP and the Credit Guarantee Institution. These are important pillars of a modern economy as well as major steps in alleviating poverty and facilitating trade and consumption.
Let’s return to the oil and gas sector, where President Tinubu’s reforms started and where the results have been most transformational. As I hinted last week, the President’s implementation of the Petroleum Industry Act and his executive orders have transformed Nigeria’s upstream oil and gas industry. From an industry unable to attract new investment for decades, major IOCs have resumed investment in the sector. Shell led the way with its $5bn Bonga Final Investment Decision, and others, including Exxon Mobil and Total Energies, have made similar announcements. Local players – Renaissance Africa, Oando and SEPLAT – are also making major investments. The NNPC is now led by more credible industry leaders (even though the institution remains controversial), and the country’s oil output continues to surge. In the downstream, we are lucky that Dangote Refinery is now producing, leading to a market-reflective fuel price regime. Investments are now proceeding across the industry value chain, spurred by the deregulation of Nigeria’s downstream.
The major criticism of the reforms has been the impact on the poor, which is real. The evidence confirms that the government is itself aware of this issue, and it is visibly launching measures to ameliorate these issues: CNG vehicles to lower transportation costs, cash transfers to vulnerable households, NELFUND loans to poor students, credit schemes to enhance consumption, and free technical education in all Federal Government-owned technical schools. Complementary policies, such as the six regional development commissions, should eventually impact infrastructure and services across the country. The whole point of macro-stability, of course, is that inflation is declining and should further decrease, while currency stability should also aid economic production, trade and employment.
In my next article, I will examine subsisting policy challenges, but our conclusion appears compelling to the effect that the reforms embarked upon by President Tinubu and his team are succeeding, though we have some work still to do.
