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Why Tinubu’s Reforms Are Boosting Revenue but Leaving Nigerians Under Pressure

Nigeria’s economy has been divided for three years after President Bola Tinubu took office.

The government has seen revenue growth. The economy has grown in terms of GDP. The stock market has also made big gains.

But the reforms have come at a high cost. Inflation remains high. Public debt has climbed. Food, fuel, transport, rent, and basic services now take a larger share of household income.

This is the central tension in Tinubu’s economic record. The numbers show progress in reform, but daily life still feels harder for many Nigerians.

The Reform Agenda

Tinubu entered office in 2023 with a bold economic agenda.

His government removed petrol subsidy, changed the foreign exchange system, pushed tax reforms, and tried to reduce reliance on central bank financing.

These decisions aimed to correct long-standing distortions in the economy. They also aimed to free up government revenue and restore investor confidence.

The reforms quickly changed Nigeria’s fiscal direction. But they also pushed prices higher and weakened household purchasing power.

GDP Growth Shows Improvement

Nigeria’s economy has continued to expand under the reform programme.

GDP growth rose from 2.54 percent in the third quarter of 2023 to 3.46 percent in the fourth quarter of that year.

Growth averaged 3.19 percent in 2024 and improved to 3.85 percent in 2025. By the first quarter of 2026, GDP growth reached 3.89 percent.

That shows steady recovery. It also suggests that some sectors have adjusted to the new policy environment.

But growth alone does not solve the problem of hardship. Many Nigerians still feel poorer because prices have risen faster than income.

Revenue Has Increased Sharply

One of the clearest gains from the reforms is stronger government revenue.

Monthly revenue reportedly rose from about N711 billion in May 2023 to over N3.6 trillion by September 2025.

The tax-to-GDP ratio also improved to 13.5 percent after tax reforms and stronger revenue collection.

Higher revenue gives the government more room to fund infrastructure, salaries, debt service, and social spending.

But stronger revenue does not automatically improve living standards. Nigerians will judge the reforms by prices, jobs, wages, public services, and security.

Subsidy Removal Changed Public Finance

The removal of petrol subsidies remains Tinubu’s most consequential economic decision.

For years, the subsidy consumed a large part of government revenue. It also created pressure on public finances and encouraged waste in the fuel market.

Ending the subsidy reduced that fiscal burden. Estimates suggest the policy saved the government between N4 trillion and N6 trillion every year.

FAAC allocations also rose sharply after the reform. In March 2026, the three tiers of government shared over N2 trillion, compared with N629 billion in March 2023.

That gave federal, state, and local governments more money. But it also raised expectations. Citizens now expect better roads, schools, hospitals, transport systems, and social support.

The FX Reform Improved Transparency but Hurt Prices

Tinubu’s foreign exchange reform aimed to unify Nigeria’s multiple exchange rates.

The old system gave different rates to different market users. It created arbitrage, reduced transparency, and weakened investor confidence.

The new approach made the FX market more open. It also gave investors a clearer picture of the naira’s real value.

But the adjustment was painful.

The naira weakened sharply. Import costs rose. Businesses paid more for raw materials, machinery, fuel, and foreign obligations.

Consumers felt the impact through higher prices. This made the FX reform one of the biggest drivers of inflation and cost pressure.

Public Debt Has Risen

Stronger revenue has not stopped Nigeria’s debt from rising.

Total public debt stood at N87.38 trillion by June 2023. By December 2025, it had climbed to N159.28 trillion.

External debt also increased from $42.49 billion in December 2023 to $51.86 billion by December 2025.

Domestic debt rose from N59.1 trillion to N89.4 trillion within the same period.

Debt service has also become heavier. Total debt service payments rose from N7.79 trillion in 2023 to N16.26 trillion in 2025.

This means Nigeria is earning more but also spending more to service its debt.

Inflation Remains the Biggest Pain Point

For ordinary Nigerians, inflation remains the clearest sign of economic hardship.

Food prices have risen. Transport costs have increased. Rent, school fees, electricity, and health costs have also gone up.

Small businesses face higher operating costs. Many now spend more on power, logistics, raw materials, and wages.

This has weakened consumer demand. It has also made business planning harder.

The reforms may improve long-term stability, but inflation has reduced the short-term benefits for many households.

Stock Market Gains Show Investor Confidence

Nigeria’s capital market has gained strongly under Tinubu.

The All-Share Index rose from about 55,769 points in May 2023 to around 131,000 points. That represents one of the strongest rallies since Nigeria returned to civilian rule in 1999.

Investors have responded to reforms, bank recapitalisation, improved earnings, and a more liberalised market.

But the stock market does not reflect the full economy.

Many Nigerians do not own equities. So the market rally has not translated into direct relief for most households.

Infrastructure Remains a Key Bet

The government has also pushed infrastructure as part of its long-term plan.

The Lagos-Calabar Coastal Highway stands out as one of the administration’s flagship projects. The project aims to improve trade, logistics, tourism, and regional connectivity.

The government has also secured foreign financing for key segments of the project.

If executed well, infrastructure spending could support jobs, investment, and productivity.

But Nigerians will watch cost, transparency, delivery timelines, and real economic impact.

Expert View

Tinubu’s reforms have improved some macroeconomic indicators, but they have also exposed Nigeria’s weak social safety net.

The government has stronger revenue. Investors have more confidence. The FX market is more transparent. The subsidy burden has reduced.

But the reforms were introduced into an economy already weakened by low wages, poor infrastructure, insecurity, and low productivity.

That is why the pain has been severe.

Reforms can correct distortions, but they must come with protection for vulnerable citizens. Nigeria needs targeted welfare, cheaper mass transport, food security measures, job creation, and stronger support for small businesses.

The next phase should move from reform announcements to visible relief. Without that, the government may win the macroeconomic argument but lose public trust.

What This Means for Nigerians

The first three years of Tinubu’s economic reforms show both progress and pain.

The government has improved revenue and restored some policy credibility. But Nigerians still face high prices, weak purchasing power, and rising living costs.

The real test will come next.

Can higher revenues improve public services? Can inflation fall? Can wages catch up with prices? Can the government reduce debt pressure? Can reforms create jobs beyond stock market gains?

Until those questions produce better answers, many Nigerians will continue to see the reforms as necessary but painful.

FAQ

What are Tinubu’s main economic reforms?

The main reforms include the removal of the petrol subsidy, foreign exchange reform, tax reforms, higher revenue mobilisation, and efforts to reduce central bank deficit financing.