From subsidy shock to steadier ground: Tinubu’s economic reform story in three years

By Egena Sunday Ode

May 29, 2023, was the day Nigeria’s economic script flipped. In his first words as president, Bola Tinubu declared “fuel subsidy is gone.” Within hours, pump prices more than doubled across filling stations, and the Central Bank set the naira free to find its own value. Transport fares tripled overnight. Sellers of perishable goods like tomatoes watched them rot because buyers could no longer afford the trip to the markets. For two years, Nigerians called it hell, but government called it the price of rebirth.

In three years, the pain has not vanished. But something else has appeared: a pulse of stability. Food inflation, once the nightmare of every household, is easing. The naira, though still battered, no longer swings wildly by the week. Reserves are thicker, trade is back in surplus, and growth, while modest, is steady. The question now is whether the corner government says it has turned can be felt by the ordinary Nigerian.

The subsidy regime was swallowing trillions and distorting everything it touched. With crude output choked by theft and debt service eating nearly every naira earned, Tinubu’s team argued the country was on a fiscal cliff. So the bandage was ripped off. Petrol that sold for ₦185 per litre on May 28 was over ₦500 nationwide by May 31. The official exchange rate, long propped up, was merged with the street rate. The naira fell sharply. Inflation that was already high shot into the 30s. The Nigeria Labour Congress marched. Opposition parties called it reckless. But the administration insisted this was the only way to stop borrowing to fund consumption.

The immediate aftermath was brutal. From Abuja to Aba, transport operators parked their buses because they could not break even. Food prices tracked diesel prices uphill. By late 2024, inflation was above 33%, and many families cut meals from three to one. Yet inside the hardship, the fiscal math was changing. With subsidies gone, Federation Account allocations to states jumped. Money that once vanished at the pump began to show up in budgets for roads, clinics, and schools. Petrol imports, the single biggest drain on foreign exchange, collapsed by two-thirds as local refining ramped up and demand adjusted. That freed dollars for the Central Bank to start clearing a backlog that had trapped manufacturers and airlines for years.

Step into Apapa port in 2026 and the mood is different from 2023, and you don’t need a spreadsheet to see it. Trucks are moving. The backlog of uncleared goods is down. The CBN says reserves now cover more than nine months of imports, a buffer Nigeria has not enjoyed in years. Exporters, especially of cocoa, sesame and manufactured goods, are finding the unified exchange rate works in their favour. For the first time in a long while, Nigeria is selling more than it buys. In the markets, the shift is quieter but real. After months of decline, inflation is back inside the policy target range. Food inflation, the most painful slice, has cooled significantly from its peak. Traders in Oyingbo say the weekly spikes have stopped. “Price still high,” one tomato seller shrugs, “but at least it is not jumping every market day.”

Growth has also picked up. The economy that crawled in 2024 managed close to 4% in 2025. Oil production, once below a million barrels a day, is back around the OPEC quota. The non-oil sector – ICT, transport, services – is doing most of the lifting, a sign the economy is slowly diversifying.

Four decisions explain most of the turnaround. Ending the petrol and FX subsidies stopped the bleeding. What looked like cruelty in 2023 now looks like arithmetic: you cannot run a country on imported fuel sold below cost and a dollar rate no one believes. Then the Central Bank chose orthodoxy over quick fixes. It kept interest rates high to fight inflation and resisted the urge to print money. It cleared overdue FX forwards, restoring a measure of trust with investors. Capital that fled in 2023 has started to tiptoe back. Alongside that, tax reforms widened the net. Lagos crossed ₦1 trillion in tax receipts for the first time, and the national tax-to-GDP ratio moved up. That matters because debt service, which once took nearly all revenue, now takes less than half. And finally, government cushioned the blow, however imperfectly. Cash transfers reached millions of households. A student loan scheme was rolled out. Duty waivers targeted food and pharmaceuticals. None of these erased the pain, but they kept it from becoming a collapse.

Talk to Nigerians and the applause is muted. Wages have not caught up with prices. Power supply is still epileptic. A new Middle East flare-up in March sent fuel and food costs up again, a reminder of how fragile the gains are. The President’s 7% growth target for 2027 looks ambitious when the economy is growing at just under 4%. Analysts warn that stability is not prosperity. Reserves can be high and people can still be poor. Inflation can be “within target” and still eat a month’s salary in a week. The real test of reform is whether a teacher in Minna or a welder in Nnewi can feel it in their pocket.

Tinubu has likened the reforms to childbirth: long labour, intense pain, then relief. Nigeria is somewhere in that final push. The macro numbers suggest the worst of the crisis is over. The naira is no longer in freefall. Imports are down. States have more money. Investors are calling again. But the next phase is harder than the first. It means translating stability into jobs, into cheaper food, into power that stays on. It means making sure the trillions saved from subsidy do not disappear into new leakages. It means resisting the temptation, as 2027 politics approaches, to reverse course.

Three years ago, Nigeria chose shock therapy. Today, the fever has broken. Whether the patient can now walk, work, and feed his family – that is the story next year must tell.