Tinubu’s Two-Year Mark: Defending Reforms Amidst Economic Crossroads

As Nigeria navigates the complexities of President Bola Ahmed Tinubu’s second year in office, the country finds itself at a critical juncture where bold economic reforms intersect with persistent citizen hardships. The President’s defiant defense of controversial policy decisions on his May 29, 2025 anniversary reveals an administration confident in its long-term vision yet acutely aware of mounting social pressures.

From the perspective of Nigeria’s business community, particularly as articulated by Abdul Samad Rabiu, Chairman of BUA Group and one of Africa’s most prominent industrialists, the Tinubu administration has fundamentally transformed the operating environment for serious enterprises. Rabiu’s assessment, delivered from the lens of someone who has navigated decades of Nigerian economic dysfunction, presents a compelling case for reforms that many politicians feared to implement.

The fuel subsidy removal stands as perhaps the most transformative yet controversial decision of this administration. Rabiu’s international perspective illuminates the scope of this challenge, revealing how Nigeria was essentially subsidizing the entire West African region while selling petroleum products at rates that no other country could sustain. His observation that Niger Republic imported 100 percent of its fuel from Nigeria due to artificially low prices demonstrates how the subsidy had become a regional economic distortion rather than a targeted Nigerian welfare program. The dramatic reduction in fuel consumption by 40-50 percent following the policy change reflects not decreased Nigerian demand but the elimination of cross-border arbitrage that was bleeding the national treasury.

President Tinubu’s anniversary address reinforced this narrative, painting the subsidy removal as a choice between immediate pain and eventual economic collapse. His assertion that the only alternative was “a fiscal crisis that would have bred runaway inflation, external debt default, crippling fuel shortages, a plunging Naira, and an economy in free-fall” frames current difficulties as necessary medicine for long-term health. The statistical improvements he presented support this argument, with external reserves growing from $4 billion to over $23 billion and debt service-to-revenue ratios dropping from nearly 100% to under 40%.

The foreign exchange unification represents another cornerstone of structural reform that business leaders like Rabiu celebrate for its operational impact. Previously, industrialists spent considerable time and resources seeking foreign exchange allocations from the Central Bank of Nigeria, creating an inefficient system where business success often depended more on bureaucratic access than operational excellence. Rabiu’s revelation that he personally spent half his time trying to secure forex and would camp in Abuja for days awaiting CBN allocations illustrates the absurdity of the previous system. Under the unified regime, he has met the current CBN Governor only once in two years because market mechanisms now function without bureaucratic interference.

However, industry assessments reveal the complex realities behind these reforms. Gabriel Idahosa, President of the Lagos Chamber of Commerce and Industry, while acknowledging the necessity of subsidy removal in attracting investors with cost-reflective tariffs, expressed concerns about businesses paying heavily for services they don’t optimally enjoy. His observation that the Dangote Refinery’s diesel supply crashed prices from N1,800 to N1,225 per litre demonstrates how local production can provide relief, yet the broader manufacturing sector continues struggling with multiple cost pressures.

The Manufacturers Association of Nigeria maintains a more critical stance, with President Francis Meshioye arguing that manufacturers remain worse hit by the combination of fuel subsidy removal, Naira devaluation, electricity tariff hikes, and interest rate increases. This perspective highlights the uneven impact of reforms across different sectors of the economy, suggesting that while some industries benefit from improved market mechanisms, others face compounded challenges that threaten their viability.

The restoration of business confidence emerges as a crucial but often overlooked benefit of the current administration. Rabiu’s detailed account of how BUA’s Port Harcourt terminal was arbitrarily shut down under a previous administration, costing 500 million dollars in investment and 4,000 jobs, illustrates the capricious environment that previously characterized Nigerian business operations. The intervention was restored only through direct presidential access, highlighting how business success often depended on political connections rather than operational merit. Today’s environment, where such arbitrary actions are no longer tolerated, represents a fundamental shift toward rule-of-law governance that enables long-term planning and serious capital allocation.

This confidence translates into tangible investment decisions. Since Tinubu took office, BUA Group has committed over one billion dollars to Nigerian expansion, including food facility expansions, a newly completed Plaster of Paris manufacturing plant in Port Harcourt with capacity of 2,000 tons per day, a 20MW solar energy project in Sokoto for its cement facility, and a 700-ton-per-day Mini-LNG facility in Ajaokuta, Kogi State. These investments reflect not just available capital but confidence in policy consistency and operational predictability that enables multi-year project planning.

The macroeconomic statistics presented by President Tinubu paint an impressive picture of fiscal consolidation and revenue generation, though they must be viewed alongside significant foreign exchange commitments that tested the administration’s financial priorities. GDP growth reaching 3.4% for 2024, state revenues increasing by over N6 trillion, and the tax-to-GDP ratio jumping from 10% to 13.5% in one year all suggest successful structural adjustments. Nigeria Customs Service recording unprecedented revenue of N1.3 trillion in the first quarter of 2025, more than double previous year collections, supports claims of improved economic management and reduced leakages.

These revenue improvements enabled the administration to address critical foreign exchange obligations that had created reputational damage for Nigeria in international markets. The settlement of accumulated debt service to international financial institutions and the systematic clearing of foreign airline repatriation backlogs represented substantial foreign currency outflows that could have been politically controversial given domestic economic pressures. However, these payments proved essential for restoring Nigeria’s credibility with global partners and maintaining access to international capital markets necessary for long-term development financing.

Yet these achievements coexist with stubborn inflationary pressures that continue defining daily life for ordinary Nigerians. Headline inflation accelerating from 22.2% to 34.8% since reform implementation represents perhaps the administration’s greatest challenge. Idahosa’s analysis identifies key drivers as insecurity affecting agricultural productivity, post-harvest losses due to inadequate storage infrastructure, and exchange rate impacts from high import consumption patterns. This suggests that while macroeconomic fundamentals improve, supply-side constraints continue generating price pressures that erode purchasing power.

The foreign exchange market remains a work in progress despite unification benefits. Idahosa noted the Naira’s depreciation to above N1,500 per dollar in March 2024, though subsequent improvements toward N1,000 or lower suggest policy adjustments are gaining traction. His call for the CBN to sustain regulatory reforms in the FX market indicates cautious optimism about current trajectories while acknowledging continued volatility challenges.

Infrastructure development has accelerated through resources freed by subsidy removal and improved revenue collection. Projects like the Lagos-Calabar highway, Sokoto-Badagry road, and various tax credit scheme initiatives address longstanding logistics challenges that made transporting goods prohibitively expensive. Rabiu’s emphasis on infrastructure as critical for reducing business costs reflects broader industry recognition that improved connectivity will enable competitiveness gains across sectors.

Food security interventions demonstrate the administration’s tactical flexibility within broader reform frameworks. The six-month tariff waiver that disrupted rice hoarding, according to Rabiu’s assessment, showed how temporary measures can address specific market distortions without abandoning structural reform principles. By allowing immediate rice imports while domestic harvests continued, the policy cut out middlemen who were creating artificial scarcity and driving prices to N110,000 per bag while farmers received minimal benefits.

The President’s detailed focus on tax reforms designed to ease citizen burdens reflects awareness of mounting social pressures. Zero VAT on food, education, and healthcare, full exemptions for rent and public transportation, and elimination of multiple taxation all represent attempts to provide relief while maintaining revenue generation capacity. However, implementation challenges and the complexity of Nigeria’s federal system mean these reforms require sustained political will across multiple government levels.

Security improvements show mixed results with regional variations that affect different sectors unequally. While tactical victories in specific areas represent progress, Idahosa’s emphasis on addressing insecurity affecting agricultural productivity highlights how security challenges continue constraining key sectors. His recommendation for moving policing from exclusive to concurrent legislative lists reflects broader recognition that community-level security solutions are essential for agricultural and rural development.

Technology and innovation initiatives, including NASENI’s electric vehicle assembly and drone engineering programs, suggest forward-looking policy development that could diversify the economy beyond traditional sectors. The upcoming Motherland Festival and enhanced diaspora engagement policies indicate efforts to leverage Nigeria’s global population for economic development, though these remain early-stage initiatives requiring sustained implementation.

The fundamental tension in Nigeria’s current trajectory lies between impressive macroeconomic statistics and persistent cost-of-living pressures that define citizen experience, a reality starkly illustrated by contrasting assessments from different stakeholders. The National Bureau of Statistics reports that while headline inflation dropped to 23.71% in April 2025 from 24.23% in March, representing some improvement, a joint World Bank and NBS report estimates that over 129 million Nigerians now live below the national poverty line, a sharp increase from 104 million in 2023. This sobering statistic reveals how macroeconomic reforms, though praised internationally, have translated into widespread economic hardship at the household level.

Leading business figures present a markedly different perspective on the administration’s performance. Aliko Dangote has been consistently supportive of Tinubu’s economic policies, particularly praising the removal of fuel subsidies and exchange rate unification for boosting investor confidence. His assessment points to foreign exchange reserves increasing to over $38 billion and the fiscal deficit dropping from 5.4% of GDP in 2023 to 3.0% in 2024 as evidence of successful structural adjustment. Dangote’s enthusiasm extends to public-private partnership initiatives, citing infrastructure projects like the Lagos-Calabar Coastal Road and Sokoto-Badagry Highway as tangible manifestations of improved economic management.

Tony Elumelu echoes similar sentiments while providing nuanced criticism that acknowledges implementation shortcomings. He emphasizes that Tinubu’s reforms were necessary to prevent economic collapse and highlights initiatives like the Student Loan Act, Consumer Credit Scheme, and Federal Ministry of Livestock Development as drivers of long-term economic stability. However, Elumelu’s assessment includes the critical observation that hardship caused by subsidy removal could have been better cushioned with upfront social safety nets, suggesting that policy sequencing rather than policy direction represents the administration’s primary weakness.

This divergence between elite business opinion and statistical poverty data illuminates the uneven distribution of reform benefits across Nigerian society. While large-scale industrialists like Dangote and Rabiu celebrate improved business operating environments and policy predictability, the broader population experiences these same reforms through the lens of increased costs for basic necessities without corresponding income improvements. The government’s cash transfer program, designed to cushion reform impacts, has faced implementation challenges that critics describe as too little, too late, highlighting the gap between policy design and effective delivery.

President Tinubu’s repeated acknowledgment of citizen sacrifices and appeals for continued patience reflect political awareness of mounting frustrations from voters who expected immediate improvements rather than delayed gratification. This dynamic creates a race between reform benefits materializing and political tolerance exhausting.

Business community perspectives, while generally supportive of structural reforms, highlight implementation gaps that continue constraining growth. Idahosa’s concerns about businesses paying for services they don’t optimally receive, particularly regarding power supply, suggest that infrastructure improvements must accelerate to justify increased costs. Similarly, MAN’s criticism that manufacturing growth wasn’t prioritized in reform sequencing reflects missed opportunities for industrial transformation that could provide employment and reduce import dependence.

The international context adds complexity to Nigeria’s reform trajectory, particularly as global capital markets and foreign direct investment flows respond to the administration’s policy changes. Nigeria’s capital markets have experienced mixed performance under Tinubu’s leadership, reflecting both investor optimism about structural reforms and concerns about implementation challenges. The Nigerian Exchange Limited has shown resilience despite initial volatility following subsidy removal and exchange rate unification, with market capitalization recovering as institutional investors recognize the long-term benefits of policy normalization.

Foreign direct investment flows into Nigeria have begun showing signs of recovery after years of decline, though the pace remains below the country’s potential given its market size and resource endowment. International investors appear cautiously optimistic about the administration’s commitment to market-oriented reforms, particularly the elimination of multiple exchange rate windows that previously created arbitrage opportunities and discouraged legitimate investment. However, persistent inflation and infrastructure constraints continue limiting the attractiveness of Nigeria’s investment climate compared to other emerging markets.

Within the West African regional context, Nigeria’s reform trajectory stands out for its boldness and scope, though neighboring countries have taken different approaches to similar challenges. Ghana’s experience with IMF-supported stabilization programs provides a regional comparison point, while countries like Côte d’Ivoire have maintained more gradual adjustment strategies. Nigeria’s size and regional economic influence mean that its policy choices significantly impact broader West African capital flows and investment patterns, creating both opportunities and risks for regional integration.

South Africa’s experience as Africa’s most developed capital market offers interesting parallels and contrasts to Nigeria’s current trajectory. South African markets have faced their own challenges with policy uncertainty and structural constraints, though the country’s more established institutional framework provides different tools for managing economic transformation. The rand’s performance and South African equity market trends during similar reform periods suggest that Nigeria’s capital market volatility may moderate as policy credibility strengthens over time.

Global emerging market trends also influence Nigeria’s capital market performance and foreign investment attractiveness. As international investors reassess emerging market allocations based on geopolitical tensions and monetary policy changes in developed economies, Nigeria competes with other frontier markets for scarce capital resources. The administration’s success in demonstrating fiscal discipline and policy consistency will determine whether Nigeria can attract its proportional share of emerging market investment flows.

Looking forward, the sustainability of current reforms depends largely on political will maintenance and citizen patience endurance. President Tinubu’s consistent messaging about necessary sacrifices for future prosperity represents a high-stakes gamble on Nigerian democracy’s capacity for delayed gratification. The coming months will test whether macroeconomic improvements can translate into tangible quality-of-life improvements before social pressures overwhelm reform momentum.

The business community’s mixed but generally positive assessment suggests that structural foundations are being laid for sustainable growth. Rabiu’s confidence in continuing to bet on Nigeria, backed by billion-dollar investment commitments, reflects industry belief that current reforms create long-term competitive advantages. However, the pace of improvement must accelerate to match citizen expectations and political timelines.

Nigeria’s economic transformation under President Tinubu represents a bold experiment in democratic reform implementation. The administration has demonstrated remarkable consistency in pursuing difficult structural adjustments despite mounting political pressure. Statistical evidence suggests genuine progress on fiscal fundamentals and institutional governance that business leaders acknowledge and validate through investment decisions.

Yet the persistence of high inflation and cost-of-living pressures means the real test of presidential success lies not in government spreadsheets but in Nigerian markets, households, and daily economic experiences. The President’s appeal for continued patience approaches the limits of citizen endurance, making the next phase of his presidency crucial for both political survival and national economic transformation.

As Nigeria enters the second half of Tinubu’s first term, the administration’s ability to translate macroeconomic foundations into improved quality of life will determine whether current reforms represent successful structural adjustment or unsustainable political experimentation. The stakes could not be higher for a nation whose potential remains vast but whose patience for unfulfilled promises grows increasingly limited.