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By Merit Ibe
The Centre for the Promotion of Private Enterprise (CPPE) has said the first three years of President Bola Tinubu’s administration have been defined by tough but necessary economic stabilisation reforms that pulled the country back from severe macroeconomic distress, even as Nigerians continue to grapple with high living costs and weak purchasing power.
In a new assessment titled “Three Years of the Tinubu Administration: From Stabilization to Shared Prosperity,” CPPE said the administration took office at a time when Nigeria’s economy was already under intense pressure, with acute foreign exchange shortages, multiple exchange rates, weakening investor confidence and external reserves reportedly below $5 billion. It added that fiscal instability was deepened by excessive reliance on Ways and Means financing and a fuel subsidy regime that had become unsustainable, distortionary and a major drain on public finances.
According to the group, the administration’s early focus was therefore not expansionary growth but macroeconomic survival, requiring urgent structural interventions to restore stability and rebuild confidence. It identified fuel subsidy removal and exchange rate unification as the two defining reforms that reshaped the economic landscape, describing both as long-delayed but unavoidable decisions that corrected deep distortions in pricing, fiscal allocation and foreign exchange management.
CPPE said the removal of fuel subsidy immediately reduced fiscal leakages and curtailed rent-seeking in the downstream petroleum sector, while exchange rate unification improved transparency in the FX market, strengthened price discovery and reduced arbitrage opportunities that had previously undermined investment flows and economic planning. However, it stressed that these reforms triggered severe short-term shocks, including higher fuel and transport costs, rising production expenses and accelerated imported inflation due to naira depreciation.
The report noted that households bore the brunt of the adjustment process, with real incomes falling and poverty pressures intensifying as inflation surged across key consumption categories. It described the resulting cost-of-living crisis as one of the most difficult social consequences of the reform programme, even though the policy direction was considered economically necessary.
Despite these challenges, CPPE said early signs of macroeconomic stabilisation are emerging. It pointed to an improvement in external reserves approaching the $50 billion mark, a sustained trade surplus, reduced exchange rate volatility since 2025 and renewed investor confidence in the economy. It also highlighted eleven consecutive months of disinflation between early 2025 and February 2026, before global shocks disrupted the trend following the Iran–U.S.–Israel conflict, which drove up global oil prices and reignited domestic inflationary pressures.
The organisation further noted strong performance in the capital market, with the Nigerian Exchange All Share Index rising from about 55,700 points in 2023 to over 254,000 points in 2026, while market capitalisation increased from approximately N30 trillion to more than N160 trillion, reflecting improved investor sentiment and capital inflows.
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It also commended the cessation of Ways and Means financing, describing it as a key step toward monetary discipline, although it warned that it exposed structural weaknesses in fiscal management.
CPPE added that emerging domestic refining capacity, particularly the Dangote Refinery, has strengthened Nigeria’s energy security, reduced import dependence and supported foreign exchange conservation, describing it as a critical shift toward a more resilient production structure.
However, the group warned that despite these gains, macroeconomic stabilisation has yet to translate into meaningful welfare improvements for most citizens. It said inflation remains elevated, purchasing power is still weak and consumer confidence fragile, stressing that the next phase of reforms must prioritise job creation, income growth and poverty reduction.
It also flagged insecurity as a major drag on recovery, noting its impact on agriculture, food supply chains and rural livelihoods, while warning that persistent threats to farmers continue to undermine food security and fuel inflation. Structural bottlenecks such as high energy costs, weak infrastructure, policy inconsistency, logistics constraints and elevated interest rates were also identified as key obstacles to industrial competitiveness and job creation, with the power sector described as one of the most binding constraints on growth.
On fiscal sustainability, CPPE raised concerns about Nigeria’s rising debt burden, which stood at ₦159.3 trillion as of December 2025, noting that while the discontinuation of Ways and Means financing was positive, revenue growth has not kept pace with financing needs. It said the depreciation of the naira and securitisation of legacy obligations have further expanded the debt stock, creating additional pressure on fiscal space and debt servicing.
The report urged accelerated implementation of tax reforms to strengthen government revenue and improve fiscal resilience. It also emphasised that governance quality will determine whether reforms succeed or fail, warning that public trust depends on transparency, efficiency and prudent management of public resources.
CPPE concluded that while the administration has succeeded in stabilising a fragile economy and laying the groundwork for recovery, the real challenge lies ahead in converting macroeconomic gains into inclusive prosperity. It stressed that the success of the reform agenda will ultimately be judged not by reserves or market indices, but by improvements in jobs, incomes and living standards, adding that sustainable reform depends on shared sacrifice, fairness and restored public trust.
