For Whose Benefit?
The Political Economy Of Nigeria's Reform Agenda
There is a particular disorientation that comes from following Nigerian economic policy closely. The official account and the lived account have almost stopped speaking to each other. Government ministers, international institutions, and financial analysts describe a country that has done the hard work, taken the bitter medicine, and turned a corner. Many Nigerians describe something else entirely: a monthly cost of living that keeps climbing, a public infrastructure that keeps failing, a state that keeps asking for patience while delivering less. Both groups are describing the same country, but they are not describing the same experience of it.
I have followed Nigerian public policy long enough to feel and observe that gap. What strikes me is not that the two accounts differ, but how little discomfort that difference produces in official circles. The reform story is performed for one audience and felt by another. The validation that matters, the credit ratings, the Eurobond spreads, the IMF communiqués, arrives from outside. The costs land hard on those inside. And the people managing the programme seem, on the whole, unbothered by this asymmetry. That unbotheredness is what this piece is trying to explain. The question is not whether there is a plan. It is whose plan it is, and how does that shape who wins and loses?
The Case for the Reforms
There is an intellectual tradition behind these reforms, and it deserves to be stated clearly before it is questioned. It holds that the forces of demand and supply should allocate resources, not government decisions. That subsidies distort incentives and reward the wrong people. That overvalued currencies protect connected importers at the expense of productive enterprise. And that a state which cannot service its debts cannot govern. The prescription that follows from these premises is logical: remove the subsidies, unify the exchange rate, raise taxes, and cut spending to close the fiscal gap, restore price signals, and growth will follow.
Nigeria’s subsidy regime at the time of Tinubu’s inauguration in May 2023 was genuinely indefensible. In principle, subsidies are intended to cushion all citizens, particularly the poor. However, it ended up being mainly a benefit to middle-class Nigerians, who were more likely to own cars, rather than to a larger subset of the population. Whilst also being of tremendous benefit to nefarious actors like: fuel smugglers running product across the border into Benin and Niger, and to a procurement apparatus riddled with ghost volumes and captured intermediaries. The fiscal cost was enormous and growing: by 2022, the NNPC was remitting almost nothing to the federation account because subsidy deductions consumed its revenue. The FX regime was similarly distorted. Multiple exchange rates, enforced by the CBN, protected those with access to the official window: importers of luxury goods, politically connected businesses, and large corporates who could arbitrage the spread. The naira was overvalued at a rate that served a narrow constituency while starving manufacturers of the foreign exchange they needed for inputs. On fiscal sustainability, the critics of the pre-2023 trajectory had a point. Debt service was consuming an alarming share of federal revenue. The space to manoeuvre was closing. Raising revenue and reducing expenditure was unavoidable.
The diagnosis of these systems is solid. But we must ask why the logic of these reforms lays the cost of transition so heavily on citizens and treats their discomfort as acceptable collateral.
What Tinubu Actually Did
The administration moved early on fuel subsidies, ending a regime that had consumed an increasing share of the federation's revenue and had become administratively indefensible. Electricity tariffs followed, with the multi-year tariff order raising prices substantially for higher-consumption bands while exempting the lowest. A new tax framework consolidated multiple levies and raised the value-added tax rate, extending the reach of formal taxation while claiming to simplify compliance. Central bank leadership changed, the monetary stance tightened, and bank reserve requirements rose. By mid-2024, the policy rate stood at 26.75%. FX management shifted from a tighter, administered regime to a looser one, resulting in a sharp devaluation. Each of these moves has a clear address in the intellectual tradition described above: subsidies distort, unified rates reflect reality, tight money restores credibility, and broader taxation funds a leaner state.
This is reminiscent of Nigeria’s previous attempt at wide-ranging macroeconomic reform. In 1986, the Babangida government launched the Structural Adjustment Programme under IMF and World Bank pressure. The sequencing was the same: devalue the currency, remove subsidies, liberalise trade, shrink the state, restore market signals. The rationale was identical too.
What the tradition does not specify is who pays for the transition while waiting for the growth that is supposed to follow. This is a choice, and every choice about who bears the cost of adjustment and who captures its benefits is a political one, made by people with interests, defended by institutions that benefit from it. When the finance minister talks about “balancing the books,” and the central bank governor speaks the language of price stability, they are not delivering neutral verdicts. They represent the assumptions of a particular intellectual tradition, one that has learned to present its policies as common wisdom rather than the product of political deliberation. No policy is above politics. And a tradition that insists it is should arouse our suspicion. What follows is an account of how that tradition operates across the three pillars around which policymaking energy in contemporary Nigeria is organised: fiscal policy, monetary policy, and the activation of the private sector as a substitute for public provision.
Sacrifices for You, Instant Gratification for Thee
Before the reforms, the government subsidised petrol and electricity, absorbing part of the cost on behalf of citizens. That arrangement had real problems. But removing it without replacing it meant one thing above all: every price that depended on fuel or power went up. That is to say, almost every price. Transport costs. food, rent, etc. By June 2024, headline inflation had reached 34.19%. The government rebased the consumer price index shortly after, which changed the headline number, but food inflation was still running at 21.97% year-on-year by June 2025.
The touting of public-private partnerships and the principle it encodes is straightforward. Under a PPP and other associated attempts to centre the private sector in governance, a private company finances and operates a piece of infrastructure, whether a road, a power plant, a water treatment facility, or a hospital, and recovers its investment by charging users. The problem is not that private capital is involved. The problem is what happens to the logic of provision when every project must first satisfy an investor before it can serve a citizen. A road that connects a poor rural community to a market town may be essential. It is not, by most financial calculations, profitable. Under a purely public model, it gets built because it is needed. Under a revenue-recovery model, it waits, sometimes indefinitely, for a business case that may never arrive. And where projects do get built, the toll gate goes up, the water tariff rises, and the electricity connection fee prices out the household that needs it most. The press release calls it modernisation. In reality, it reduces access as there is now a family that can no longer afford that connection.
The monetary dimension is where the haste to follow this intellectual tradition's conclusions is most revealing. When the Central Bank raises interest rates, the stated purpose is to reduce inflation by making borrowing more expensive. That logic is not wrong. But it rests on an assumption that is far from settled: that the inflation it is fighting is primarily driven by too much money chasing too few goods, too much demand. The research tells a more complicated story. Economists remain in genuine disagreement about what drove post-pandemic inflation worldwide, with a substantial body of evidence pointing to supply shocks, disrupted production chains, and energy price spikes as the primary culprits rather than excess demand. If that is true, then aggressively tightening monetary policy does not cure the disease. It simply makes borrowing expensive while the underlying supply problems remain unaddressed. The intellectual tradition, however, does not linger on that debate. It reaches for the interest rate because that is what the playbook says, and because a policy rate of 26.75% sends a signal that portfolio investors and international lenders read immediately and reward accordingly. For them, high rates mean high returns. Nigerian government bonds and treasury bills pay well, and capital flows in. For a small business owner trying to expand, or a manufacturer trying to finance a new production line, the same number means credit is effectively out of reach. Banks earn more by lending to the government than by lending to the economy. Working capital dries up. Production stays constrained. And because production stays constrained, the supply shortages that drive inflation in the first place remain unaddressed. The policy attacks the symptom it has chosen to see while leaving the cause intact. The naira’s devaluation, meanwhile, raised the price of every import and every locally made good that depends on imported inputs. The costs of the monetary stance are distributed across the whole economy. The benefits flow primarily to those holding financial instruments.
The patience being asked of households is not asked of everyone. The largest banks have already booked the upside. Zenith reported a profit before tax of roughly ₦1.0 trillion by Q3 2024; GTCO closed 2024 with about ₦1.266 trillion, both showing triple-digit growth. Oil producers have surged too. Seplat’s half-year 2025 revenue was around ₦2.17 trillion, driven by higher production and margins. The stock market has validated the story, the NGX All-Share Index hitting new highs in June and again in October 2025. International lenders and portfolio funds have been paid in the present, with 364-day T-bills and longer-dated OMO paper clearing at true yields in the high teens to above 20% for much of 2025. Meanwhile, the generator economy thrives precisely because citizens must purchase the public goods they lack. Industry estimates put the diesel generator market at roughly $0.5 billion in 2023, with growth expected. Inside government, restraint has not matched the rhetoric: lawmakers proceeded with fleets of new SUVs, each costing more than $150,000, while urging the public to tighten their belts.
Taken together, these three pillars do not merely reflect a set of policy preferences. They exploit two things simultaneously. The first is the Nigerian elite’s appetite for a governing philosophy that tells them reducing their burden of responsibility to their own people is not negligence but wisdom, not abdication but reform. The second is something harder to say plainly: decades of state failure have worn down the Nigerian citizen’s belief that government can be an instrument of collective transformation. Into that exhaustion, this tradition inserts a vision of efficiency, one that can only be delivered by accelerating the transfer of public assets and public responsibilities into private hands. It presupposes on your behalf that your adaptation to being failed is proof enough that you are better served alone.
We Rise Together, or We Don’t Rise At All
Nigerians who lived through the structural adjustment era of the 1980s will recognise this moment. The sequencing then was the same: devalue, remove subsidies, liberalise, consolidate. The promises were the same too. So was the gap between the official account and the lived one. What the SAP produced, beyond the macroeconomic corrections it achieved on paper, was a society that stopped expecting anything from the state and started building around it. What that experiment produced was exhaustion and a society in which the ability to survive depends almost entirely on what you can individually afford.
Tinubu’s reforms have not broken from that pattern. They have made it official policy. What is presented as fiscal responsibility is, in practice, a transfer. The state cleans its books by shifting the imbalance onto households. Its ledger improves because theirs deteriorates. We are funding the validation of an intellectual tradition with our suffering.
That tradition holds that a leaner state is a better state, that individuals freed from bureaucratic encumbrance will generate the dynamism that governments cannot. Nigeria has been running that experiment informally for decades. The state retreated, and people adapted: generators, boreholes, private schools, security guards, informal savings circles. Some may choose to highlight the resilience of individual Nigerians. I would much prefer to cultivate the collective courage to question the status quo and demand a more dignified existence.
The problems Nigeria faces, insecurity, energy poverty, collapsing infrastructure, and an informal economy that traps most of those inside it, are not problems that individuals can solve by optimising their own circumstances. They are collective problems and thus require collective instruments. Only the state has the consensus, the scale, the legal authority, and the public mandate to confront them at the necessary size. Any intellectual tradition that systematically diminishes the state in favour of private solutions is not offering an alternative. It is abandoning the field. And the people left on that field are most likely you and me.
The test for Nigeria’s well-being cannot be individual. It cannot be your own lack of suffering. It cannot be proven through the record profits of a handful of banks and oil companies. And it certainly cannot be sufficiently validated by the assertion of credit rating agencies and international financial institutions that we are on the right track. It must be rooted in the well-being of our neighbors, and in our collective ability to access a decent standard of living. For too long, official neglect made every man for himself the only available strategy. It should not now be elevated into a governing philosophy.
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