Nigeria’s Painful Path from Policy to Prosperity By Shukurat T. Ibrahim
Economic instability is more than a macroeconomic term in developing nations; it is a relentless spectre that haunts daily life. It dictates the price of a meal, the struggle of a job search, and the anxiety that accompanies every trip to the market. In Nigeria, this instability has become a defining reality, a complex crisis where bold government reforms collide with profound human hardship.
The recent, bold reforms initiated by President Bola Ahmed Tinubu’s administration—namely the removal of the decades-old fuel subsidy and the unification of the foreign exchange market—were designed to break this cycle. The rationale was sound: the fuel subsidy alone cost the government a massive $10 billion in 2022, consuming funds that could have been channeled into education, healthcare, and infrastructure . Similarly, propping up the Naira with an artificial peg was unsustainable. These measures, praised by international financial institutions, were a necessary shock to the system aimed at long-term fiscal health .
However, policy is one thing; its impact on human lives is another. The immediate effect was a seismic shock to the cost of living. Almost overnight, petrol prices tripled, from around ₦189 per litre to over ₦617 . This single change sent ripples through the entire economy, as transportation costs soared and the price of every good and service that relies on it followed suit. Headline inflation surged close to 30%, its highest in nearly three decades, with food inflation even more punishing at 35% . The very foundation of daily life has been shaken; a bag of rice that was once ₦8,000 now costs over ₦60,000, turning a basic staple into a luxury for many families.
This instability is not just reflected in statistics, but in the quiet sacrifices of millions. It is the mother who now skips meals so her children can eat, and the small business owner grappling with existential uncertainty. I have seen this firsthand. A close friend who runs a small tailoring business once told me, “Every week feels like starting over.” The prices of fabric and thread are a moving target, and her customers, feeling the same pinch, can no longer afford her services easily. For the over 46% of Nigerians living below the poverty line, who spend up to 70% of their income on food, this crisis is a daily battle for survival .
The roots of this crisis are deep and predate the current administration. Nigeria’s economy is dangerously monolithic, tethered to the volatile fortunes of crude oil. When global prices fall, government revenue plummets, leading to borrowing and inflation. Furthermore, long-standing issues like widespread insecurity are choking the economic life out of vast regions. In the northwest, banditry and kidnappings disrupt farming and trade, while an insurgency persists in the north-east . A 2022 study highlighted that this insecurity negatively impacts capital formation, deters foreign investment, and forces government spending away from development and toward security, thereby crippling long-term growth .
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Despite the immense pain, there are emerging signs that the tough medicine may be starting to yield some results. The macroeconomic gains cited by the World Bank and other observers are significant. Nigeria’s GDP grew by 3.9% in the first half of 2025, and foreign reserves have surpassed $42 billion . The Naira has shown remarkable resilience, strengthening by 11.22% over the past year as of October 2025 .
The corporate sector, which suffered massive losses in 2024, is rebounding. Several major consumer goods firms have returned to profitability, and companies like MTN Nigeria that had suspended dividend payments are now on course to resume them, signalling restored investor confidence . Perhaps most encouraging is the 65% increase in non-oil export earnings in the first quarter of 2025, a promising step toward the economic diversification Nigeria so desperately needs .
The critical challenge now lies in bridging the chasm between these macroeconomic gains and the lived reality of the average Nigerian. Stabilizing an economy is meaningless if its people cannot afford to live in it. The government has initiated measures like targeted cash transfers to cushion the impact, but these need to be scaled and institutionalized urgently . The World Bank’s latest Nigeria Development Update aptly titles its report “From Policy to People,” emphasizing the urgent need to bring reform gains home by reducing food inflation, improving public spending, and strengthening the social safety net .
To achieve true stability, Nigeria must move beyond reactionary measures and embrace a consolidated, long-term strategy built on three pillars:
· Accelerate Economic Diversification: The recent growth in non-oil exports is a positive start, but it must be aggressively supported. Investment in agriculture, manufacturing, and technology is crucial to create jobs and build a resilient economy no longer held hostage by crude oil prices.
· Ensure Policy Consistency and Good Governance: Investors and citizens need to trust that government decisions will not change overnight. Consistent, transparent policies are the bedrock of confidence. Furthermore, as the research on insecurity shows, good governance and the provision of a safe environment are prerequisites for economic growth .
· Prioritize Human Capital Development and Social Protection: The ultimate goal of any economy is to improve the welfare of its people. This requires massive investment in education and healthcare, and a robust, shock-responsive social safety net that can protect the most vulnerable during periods of economic transition .
Economic instability remains one of the most persistent threats to Nigeria’s future. The current administration has taken difficult steps to reset the nation’s economic course. The success of this endeavour, however, will not be measured by the value of the Naira alone, but by the food on the table of the ordinary family. It hinges on a fundamental restoration of trust—trust that the government can not only enact tough reforms but also manage the resulting resources with integrity and a relentless focus on the people it serves. The economy can only truly stabilize when policies are made not for short-term applause, but for long-term, inclusive progress.
Shukurat Temitope Ibrahim is a PRNigeria Fellow
