Tinubu reforms stabilised economy, welfare lags – CPPE

The Centre for the Promotion of Private Enterprise (CPPE) assesses that President Bola Tinubu's administration has prioritized restoring macroeconomic stability during its first three years, addressing inherited fiscal, monetary, and foreign exchange challenges. However, the CPPE notes that the positive outcomes of these reforms have yet to significantly improve the general welfare of citizens.

According to CPPE Chief Executive Officer Dr. Muda Yusuf, the government assumed office facing severe foreign exchange illiquidity, multiple exchange rates, declining investor confidence, and depleted external reserves. Fiscal conditions were also strained by substantial Ways and Means financing and a costly fuel subsidy regime.

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The government assumed office amid acute foreign exchange illiquidity, multiple exchange rates, declining investor confidence, and weakened external reserves.

The administration's core economic stabilization strategy centered on two major reforms: the removal of the fuel subsidy and the unification of exchange rates. The subsidy removal eased pressure on public finances and aimed for a more sustainable downstream petroleum sector. Exchange rate unification was intended to improve price discovery and reduce arbitrage opportunities.

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The immediate consequence of the reforms was a significant inflationary shock. Energy prices surged, transportation and logistics costs escalated, production expenses increased sharply, and the depreciation of the naira amplified imported inflation pressures.

These reforms, while stabilizing the economy, came with considerable adjustment costs. They triggered a significant inflationary shock, escalating energy prices, transportation costs, and production expenses. The naira's depreciation further amplified imported inflation, leading to declining real incomes, increased poverty, and a cost-of-living crisis.

Despite these challenges, the CPPE observes evidence of macroeconomic recovery. External reserves have improved substantially, nearing $50 billion, the balance of trade remains positive, investor confidence has strengthened, and exchange rate volatility has moderated since 2025. The Nigerian Exchange All-Share Index saw a dramatic rise from approximately 55,700 points in 2023 to over 254,000 points in 2026, with market capitalization soaring from N30 trillion to over N160 trillion. Discontinuation of Ways and Means financing has bolstered monetary discipline, and the emergence of domestic refining capacity, notably the Dangote Refinery, has enhanced foreign exchange conservation and energy security.

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An economy that produces more of what it consumes is i