By Oyewole Sarumi
Leadership is often celebrated when it produces immediate comfort. Yet, history teaches us that some of the greatest leadership decisions are those that initially create discomfort because they seek to prevent a far greater catastrophe. Economic reforms fall squarely into this category. They rarely receive applause in their early years because they dismantle entrenched distortions before creating new opportunities. The challenge for every reforming government is that citizens experience today’s pain long before they experience tomorrow’s gains.
Three years into President Bola Ahmed Tinubu’s administration, Nigeria finds itself in exactly this paradox.
On one side are citizens confronting unprecedented increases in the cost of living. Food prices have risen dramatically. Transportation costs have multiplied. Rent, school fees, healthcare, electricity, and virtually every component of household expenditure have increased. Many families have adjusted by reducing the number of meals consumed daily, postponing medical treatment, withdrawing children from private schools, or abandoning small businesses whose operating costs have become unsustainable.
On the other side stands an administration that argues it inherited an economy built upon unsustainable fiscal practices and that painful structural reforms were unavoidable if Nigeria was to escape long-term economic decline.
The reality is that both perspectives contain elements of truth.The real challenge is separating political rhetoric from economic reality.
This article therefore adopts a forensic rather than partisan approach especially based on research done over the past 12 months (see above Preface).
Therefore, rather than asking whether Nigerians are currently experiencing hardship, a fact that is difficult to dispute, we ask a more fundamental question: Were the reforms themselves necessary, and if so, why have they not yet translated into broad-based prosperity for the citizen 36months after?
That distinction is crucial because nations do not become prosperous merely by implementing reforms. They become prosperous when reforms are carefully sequenced, competently executed, effectively communicated, and translated into measurable improvements in citizens’ quality of life.
Looking Beyond Today’s Hardship
Many public assessments of the Tinubu administration begin with inflation, exchange rates, poverty, and the cost of living. These are legitimate concerns because they represent the everyday realities of ordinary Nigerians.
However, economists evaluate reforms differently. They ask whether policies eliminate structural distortions that have prevented sustainable growth. These two perspectives frequently collide.
A family purchasing rice, beans, cooking gas, and transportation every week naturally judges government by affordability.
An economist may instead examine fiscal sustainability, exchange-rate efficiency, public debt dynamics, or monetary credibility. Be it known that neither perspective is wrong.
The challenge for policymakers is ensuring that sound macroeconomic reforms eventually improve microeconomic realities. This is the fact: That bridge has not yet been fully built.
Indeed, recent international assessments reflect this duality. The International Monetary Fund (IMF), following its 2026 Article IV consultation, commended Nigeria’s reforms for strengthening macroeconomic stability and improving resilience. At the same time, it cautioned that poverty and food insecurity remain severe, noting that millions of Nigerians continue to struggle despite improvements in fiscal and monetary indicators. This contradiction lies at the heart of Nigeria’s current economic debate.
The Economy Tinubu Inherited
Every forensic investigation begins by examining conditions before the intervention.
It is impossible to fairly assess a surgeon without first understanding the patient’s condition before surgery.
Similarly, it is impossible to evaluate the Tinubu reforms without appreciating the state of Nigeria’s economy in May 2023. By then, Nigeria faced multiple structural challenges simultaneously.
Fuel subsidies had evolved from temporary consumer support into one of the largest fiscal leakages in Africa.
The foreign exchange market had fragmented into multiple exchange-rate windows (there’s no country in the world that does this nonsense) that rewarded arbitrage instead of productivity.
The Central Bank had accumulated massive “Ways and Means” financing, effectively creating money to finance government expenditure.
Public revenues remained among the lowest relative to GDP globally, while debt obligations continued to expand.
Foreign investors struggled to repatriate funds because of persistent foreign exchange shortages.
Manufacturers faced rising production costs. Infrastructure deficits remained enormous. Power shortages constrained industrial competitiveness. Security challenges disrupted agricultural production across several food-producing regions.
We all know even if we are pretenciuos that none of these problems emerged overnight. They accumulated over decades of mis governance since the military era, and exacerbated by political elites recklessness, brigangade and wasteage of our resources.
Consequently, whichever administration assumed office in 2023 would almost certainly have faced difficult choices.
The real policy question was never whether reforms would be painful. The real question was whether delaying them would produce even greater pain in the future.
Fuel Subsidy: An Unsustainable Fiscal Burden
Perhaps no reform generated more controversy than the removal of petrol subsidy.
To many Nigerians, subsidy represented one of the few visible benefits received from government. To economists, however, the subsidy had become fiscally unsustainable.
For years, Nigeria spent trillions of naira annually subsidising petrol consumption while simultaneously borrowing to finance infrastructure, healthcare, education, and other essential public services.
Even more troubling was the fact that significant portions of subsidised fuel reportedly crossed Nigeria’s borders into neighbouring countries through smuggling networks, meaning Nigerian taxpayers indirectly subsidised fuel consumption beyond the country’s borders.
The World Bank, IMF, African Development Bank, and the Nigerian Economic Summit Group had, over many years, consistently argued that the subsidy regime distorted public finances and diverted scarce resources away from productive investment.
This explains why the fundamental policy choice confronting the new administration was not simply: “Should subsidy remain?”
Rather, it had become: “Can Nigeria continue financing subsidy without endangering fiscal sustainability?”
When viewed through this lens, subsidy removal appears less like an ideological preference and more like an economic necessity.
The mistake was not necessarily removing the subsidy. The greater challenge was failing to simultaneously deploy a sufficiently robust and credible social protection framework capable of cushioning vulnerable households from the immediate inflationary shock.
Exchange Rate Unification: Correct Diagnosis, Difficult Implementation
The second major reform involved the liberalisation of Nigeria’s foreign exchange market.
Before 2023, Nigeria operated multiple exchange-rate windows.
Different groups accessed foreign exchange at different rates.
While designed to protect strategic sectors, the system increasingly encouraged arbitrage, rent-seeking, and speculative behaviour.
Businesses with privileged access to official foreign exchange could profit simply by selling dollars into parallel markets rather than investing productively.
There’s no competitive economy across the world that can sustain such distortions indefinitely. Accordingly, exchange-rate unification addressed a genuine structural weakness.
However, implementation proved considerably more difficult than anticipated.
Large foreign exchange backlogs, declining investor confidence, limited reserves, speculative pressures, and accumulated market distortions combined to trigger a sharp depreciation of the naira before market confidence gradually began to stabilise.
This outcome illustrates an important lesson in public policy. Let’s understand that correct diagnosis does not automatically guarantee painless treatment.
Ending “Ways and Means”: The Least Understood Reform
Among all the reforms undertaken, perhaps the least appreciated is the decision to halt excessive Central Bank financing of government deficits through “Ways and Means.”
This issue rarely attracts public attention because it appears technical. Yet its significance cannot be overstated.
When governments routinely finance deficits through central bank money creation, the money supply expands beyond productive output, creating persistent inflationary pressures.
The appointment of Governor Olayemi Cardoso marked a decisive shift towards restoring monetary discipline.
The Central Bank moved away from routine monetary financing and adopted a tighter policy framework aimed at rebuilding credibility and reducing inflationary expectations.
Unlike road construction or salary increases, however, preventing future inflation does not immediately improve household welfare.
Preventive reforms often receive the least public recognition precisely because citizens notice what governments build more readily than the crises they successfully avert.
Leadership Is About Choosing Between Difficult Options
One of the greatest misconceptions surrounding economic reform is the assumption that governments always have good options available.
In reality, leadership frequently requires choosing between competing difficult alternatives.
By 2023, Nigeria had reached a point where maintaining fuel subsidies, multiple exchange rates, and expansive monetary financing simultaneously would likely have deepened macroeconomic instability, discouraged investment, weakened fiscal credibility, and increased long-term vulnerability.
This does not automatically validate every aspect of implementation.
Neither does it excuse avoidable policy mistakes.
But it does suggest that many of the headline reforms were responding to genuine structural weaknesses rather than creating entirely new problems.
The challenge before the Tinubu administration therefore extends beyond implementing difficult reforms.
It must now demonstrate that these reforms can generate tangible improvements in food affordability, employment, electricity supply, industrial productivity, and household incomes.
That is the true test of transformational leadership.
And it is that question, the gap between sound macroeconomic policy and everyday Nigerian experience, that forms the focus of the next part of this forensic analysis.
In Part II, I will examine where implementation fell short, why the reforms have not yet reached the average Nigerian, compare Nigeria’s experience with India, Indonesia, Vietnam, and Ghana, and analyse the governance lessons that should shape the next phase of the reform agenda.
_Prof. Sarumi, a digital transformation architect, political economy and policy analyst, and leadership strategist with over 40 years of cross-sector experience across Nigeria and the African continent, write from Lagos. Tel: 234 803 304 1421, Email: oyewolethecoach@gmail.com_
