Paper Gains, Street Pains: A Two-Year Review of Tinubu’s Economy
Two years into President Bola Ahmed Tinubu’s administration, Nigeria’s economy presents a complex picture of bold reforms, ambitious fiscal targets, and undeniable hardship for millions. With budgets exceeding ₦83.7 trillion, President Tinubu has spearheaded an aggressive overhaul of both monetary and fiscal policies, aiming to restore stability, attract vital investment, and propel Nigeria towards a projected $1 trillion economy.
Yet, as the Central Bank of Nigeria (CBN) commends its own efforts in rebounding foreign reserves and making strides in exchange rate unification, the daily realities of ordinary Nigerians tell a far more challenging story. Soaring inflation, a significantly devalued Naira, and deepening poverty underscore a growing disconnect between official economic figures and the lived experiences of citizens. Observers and analysts remain divided; some highlight structural progress, while others express concern about the widening gap between macroeconomic indicators and social well-being.
President Tinubu’s economic agenda saw the appointment of Wale Edun as the Minister of Finance and Coordinating Minister of the Economy, tasked with overseeing the ambitious reforms intended to usher Nigeria into the $1 trillion economy club. Crucially, Olayemi Cardoso was named as the Central Bank Governor, with a clear mandate to depart from the unconventional approaches of the previous Godwin Emefiele-led CBN and adopt a more conventional, market-driven monetary policy framework.
Upon assuming office on May 29, 2023, President Tinubu made a concrete commitment to sanitize Nigeria’s monetary policy space, which had been significantly challenged by persistent inflation, a severe foreign exchange crunch, and an unstable exchange rate regime. In his 2023 inauguration speech, he explicitly stated, “Monetary policy needs thorough housecleaning. The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy. Interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level.”
He further pledged to overhaul existing fiscal policy structures that had constrained government revenues during the Muhammadu Buhari administration. To achieve this, the President vowed to introduce comprehensive tax reforms aimed at widening the tax net and eliminating multiple taxation. “Budgetary reform stimulating the economy without engendering inflation will be instituted. Our government shall review all their complaints about multiple taxation,” he promised.
Observers Times has reviewed the Tinubu administration’s monetary policy successes and failures over the past two years, revealing a mixed bag of outcomes.
CBN’s Commendable Efforts Amidst Naira’s Depreciation
When President Tinubu took office, the country was grappling with a severe foreign exchange crunch and a highly unstable exchange rate, inheriting an official rate of N461 per dollar and a parallel market rate of N780 per dollar, leaving a significant margin of N319. The CBN also faced a staggering $7 billion foreign exchange backlog and operated multiple exchange rate windows, including the investors and exporters’ (I&E) window, the secondary market intervention sales retail window, the small and medium-size enterprises (SME) window, and the window for invisibles.
Under Governor Cardoso, the CBN has undertaken significant reforms. As of June 14, 2024, the CBN successfully collapsed the fragmented FX markets into the Nigerian Autonomous Foreign Exchange Market (NAFEM) and reintroduced the ‘Willing Buyer, Willing Seller Model.’ The apex bank also implemented a managed float system. Observers Times notes that while the Naira has depreciated from N461 in May 2023 to N1,579.4 per dollar as of May 26, 2025, these reforms have led to a more stable exchange rate environment. Critically, the CBN has commendably reduced the gap between the official and black market rates to about N40.6 as of May 2025, with the black market trading at N1,620 per dollar on May 27, 2025.
Despite this progress in stabilizing the market, a PwC Nigeria Economic Outlook report indicated a sharp decline in the Naira’s value, falling by 98 percent in just seven months between May and December 2023. Nevertheless, the CBN successfully cleared the outstanding $7 billion foreign exchange backlog following a rigorous verification exercise by forensic auditors, a major achievement lauded by economic experts.
Rebounding Reserves and Persistent Inflation
The current administration inherited a dire situation regarding net foreign exchange reserves, which had plummeted to $3.7 billion by the end of 2022, down from $14 billion in December 2021, according to JP Morgan. Observers Times analysis of the past two years shows a significant turnaround, with net reserves rising from the inherited $3.7 billion to a commendable $23.11 billion, as reflected in the CBN’s financial statements.
“This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability,” Governor Cardoso affirmed, highlighting the CBN’s strategic interventions.
However, the battle against inflation remains a formidable challenge. President Tinubu inherited a Consumer Price Index (CPI) of 22.22 percent in April 2023, with food inflation at 24.61 percent year-on-year. Despite the Cardoso-led CBN’s efforts, inflation has proven difficult to tame, surging to a historic 34.80 percent in December 2024. Food inflation reached a record 40.87 percent in June 2024. Although a rebasing of the CPI by the National Bureau of Statistics later showed inflation dropping to 23.71 percent, this figure is still higher than what was inherited.
Tinubu’s Fiscal Regime: Tax Surges Amidst Implementation Setbacks
The success of President Tinubu’s fiscal regime hinges on his promised tax reforms, the removal of fuel subsidy, and effective budget implementation.
The fiscal team has indeed made strides in reforming the country’s tax environment. In terms of revenue generation, the Tinubu-led government has witnessed a remarkable surge, with revenues from customs and the Federal Inland Revenue Service (FIRS) increasing by 300 percent. In 2024, the Nigeria Customs Service (NCS) collected over N6.1 trillion, surpassing its annual target of N5.07 trillion and significantly exceeding the N2.14 trillion collected under the previous administration in 2022. Similarly, FIRS recorded a colossal N21.6 trillion in revenue in 2024, predominantly driven by non-oil taxes, a 200 percent increase from the N10.1 trillion recorded in 2022.
Regarding budget implementation, the Tinubu administration signed a budget of N27.5 trillion in 2024, up from the N21.83 trillion 2023 budget inherited from Buhari. The “Budget of Renewed Hope” projected a total deficit of N9.18 trillion. In 2025, President Tinubu signed a record N54.9 trillion “Budget of Restoration,” with an estimated N18 trillion deficit. However, Observers Times understands that the 2024 budget is facing significant implementation setbacks, with performance at only 43 percent as of January, leading to its extension by the National Assembly to June 2025.
Expert Assessments: Commendations and Concerns
US-based financial expert, Kalu Aja, expressed skepticism, stating, “2025 budget is already unrealistic. The 2026 budget will be worse; that’s the election budget. We are still running 2024 budget,” underscoring potential fiscal challenges ahead.
Dr. Paul Alaje, an Economist and Senior Partner at SPM Professionals, acknowledged the CBN’s success in managing the foreign exchange market. He noted that the CBN inherited an FX market “where the gap between the parallel market and the official market were like sky and earth,” which significantly impacted confidence in the Naira. “One thing the administration has done is that it has managed to ensure a level of stability around N1500 to N1,500 per dollar,” Alaje told Observers Times. However, he emphasized that “Naira has been badly battered. Before they came in, even at the parallel market, it was less than N800, and the official rate was around N400. Today, official rate is times four, and the parallel market is times two. This has made the lives of many worse than it had been.”
Alaje also pointed out that while the administration raised the interest rate to about 27.5 percent in an attempt to combat inflation, “When they got to the office, inflation was double-digit, but it was not up to 30 percent. For the first time in a long time, we saw 30 percent inflation, but due to base year adjustment, we are back to 24 percent.” A significant win, according to Alaje, is the increase in import cover from less than two months to 7.5 months, indicating improved external liquidity. He added, “Nigeria was owing in terms of exchange rate, but today it has reduced significantly.” Despite these improvements, Alaje cautioned that they have come at a high cost to Nigerians, with more interest paid to service debt due to currency depreciation.
On the fiscal side, Alaje commended the surge in revenue, with NCS and FIRS exceeding their targets. “This is very commendable, but on the flip side, more people are poor. World Bank report said three out of people living in rural communities are now living in abject poverty, below $2.5.” He regretfully added, “As we speak, Nigeria still holds the title of largest number of poor people in the world.” For a way forward, Alaje strongly advocated for an increase in the minimum wage to N100,000. “We had advised that they should not settle for less than N100,000 because we know the implication of what is to come because of the economy.
For inflation to fall to 15 percent, there are things that must be done and the two things that must be addressed is exchange rate and price of energy. When we do that, in six months, President Tinubu will achieve his 15 percent inflation target.”
Muda Yusuf, Director General of the Centre for the Promotion of Private Enterprise (CPPE), informed Observers Times that the administration inherited an economy with fundamentally broken structures. Yusuf highlighted a “dysfunctional forex market,” a situation where “our net external reserves were less than $5 billion, and the FX market was filled with corruption and irregularities.” He also pointed to the “unbridled printing of money to finance the last administration, worth about N22 trillion,” which he described as a “major illegality.” The previous subsidy regime, Yusuf added, was “very scandalous.”
“One could argue that the challenge of stabilization had engaged the attention of this administration for most part of the period. However, Yusuf conceded that this is “still no excuse for the administration not to look into other forward-looking activities in the last two years.” He underscored that “the state of the country’s economy necessitated reforms that followed.” While acknowledging the necessity of these reforms, Yusuf noted their painful impact: “they inflicted pains on citizens, adversely impacted businesses, cost of production escalated, and many businesses were thrown in loss position.” These shocks, he said, even led to the departure of some large businesses from the country. “We have an aggravated situation of poverty, but the good news is that we have seen some progress,” he added, attributing some remarkable improvements to the increase in external reserves.
Yusuf commended the CBN’s orthodox monetary policy stance, stating it has had a positive impact. However, he lamented that it has also led to “prohibitive interest rates,” causing a “situation where the financial markets have become disconnected from the real economy. It is impossible to finance any business with an interest rate of 30 percent, and most of the funds are short-term funds.” Despite the progress, Yusuf emphasized that insecurity remains a major setback for the administration. He recommended that, going forward, “the government has a responsibility to ensure that we see much more impactful measures to address the phenomenon of cost of living and the recalibration of both fiscal and monetary policy. We need to ensure that the benefits of the reforms are inclusive.”
