Sequel to my earlier reaction to president Tinubu’s ambiguous attribution of Nigeria’s growing poverty to the creation of his enemies, as presented in the NATIONAL ACCORD edition of November 3, 2026, I would like to provide further evidence on how and why the reforms contributed significantly to the growth of poverty in Nigeria beyond the extant poverty narrative at the time of the president’s take-over of power on May 29, 2023. This additional insight may or may not be useful to the president’s policy aficionados in their reforming the reform strategies to make them more poverty and welfare sensitive, while improving their overall inclusiveness.
Nigeria’s economic reform programme under President Bola Ahmed Tinubu has produced a paradox: stronger macroeconomic fundamentals and increased government revenues alongside persistently high poverty and substantial pressure on household purchasing power. The October 2026 Nigeria Development Update of the World Bank, titled Beyond the Federal Purse: How Higher Revenues Shaped State Priorities, provides important evidence for assessing this paradox. It is the same update edition whose current Nigerian national debt service statistics under President Tinubu were the subject of intense public disputations and debate between the Nigerian government and the World Bank, Nigeria’s erstwhile friend.
The removal of petrol subsidies on May 29, 2023, followed very closely by foreign-exchange market liberalisation on June 14, 2023, subsequently triggered substantial increases in energy, transportation and import costs with negative spillovers of cost of food and major household essentials. These shocks were transmitted through production and distribution chains, increasing the prices of food, manufactured goods and essential services. Small businesses also faced higher operating costs, expensive credit and weakening consumer demand due to weak purchasing power.
The inflation statistics illustrate the magnitude of the adjustment impact. Headline inflation increased from 22.41 per cent in May 2023 to 27.6 per cent in January 2025 before declining to 15.2 per cent in December 2025. However, higher international oil prices and domestic fuel-price pressures interrupted the disinflation process in 2026. By August 2026, headline inflation stood at 15.4 per cent, while subsequent NBS data placed September inflation at 14.63 per cent and food inflation at 19.59 per cent. Although the inflation rate has declined from its peak, the accumulated increase in prices means that households continue to face a substantially higher cost of living than before the reforms.
The poverty statistics are equally revealing. The World Bank’s October 2026 Poverty and Equity Brief estimates that national poverty increased from 40.1 per cent in 2019 to 56.2 per cent in 2023 and approximately 63 per cent in 2026. This represents a deterioration in the welfare of millions of Nigerians. Importantly, the October 2026 Development Update reports that poverty has stabilised for the first time since 2019, although it remains exceptionally high. The Bank expects poverty to decline gradually as economic growth improves and inflation moderates.
The October Update also reveals that the reforms have substantially increased government revenues. Gross federation revenues rose by 69 per cent in real terms between 2023 and 2025, while aggregate state revenues increased by approximately 93 per cent. State capital expenditure’s share of total expenditure rose from 46 per cent to 61 per cent. However, education’s share of state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, while health remained around 7 per cent. Social protection improved from 1.4 per cent to 4.4 per cent, but the overall allocation remains modest relative to the scale of poverty.
This raises a fundamental question about the distributional consequences of the reforms: have the substantial fiscal gains translated into sufficient improvements in the living conditions of ordinary Nigerians? The evidence suggests that the transmission of macroeconomic gains into household welfare remains incomplete and even illusive when viewed side-by-side with major improvements in macroeconomic data. Despite the touted economic growth recovery and sustained deceleration in inflation, prices of food and other essential household needs continue on their upward journey, making them out of reach of the ordinary Nigeria.
Two illustrative examples will fully buttress the above thesis. The retail prices of the small-size close-up toothpaste packages (40g and 55g) that were formerly popular with the poor, increased from NN290 and N530 respectively in May 2023 to N600 and N1,000 respectively in October 2026, about 100% increase for both. The retail price of a 200ml small-size Morning Fresh dishwashing liquid which used to be affordable by low-income households, increased from N459 in May 2023 to N1,000 in October 2026. Similarly, the average price of a litre of refined petroleum products increased from N238/litre in May 2023 to N1,400/litre in October 2026. The value of the naira depreciated from N450/US$1 in May 2023 to N1,340 in 2026. All these significant cost increases were triggered by the reforms.
Nigeria is an import-dependent nation with 92.8% of its population employed in the informal, while about 38% is employed in the agricultural sectors respectively. In both sectors, wages are not regulated and some citizens earn about N30,000 or less monthly, while some farmers earn virtually nothing at all due to the effect of insecurity on farming activities. Even the regulated wages are stagnant and not indexed to inflation nor reflective of the effects of severe naira exchange rate changes. If such an economy also suffered double-digit inflation and about 300% depreciation of its exchange rate, while its average bank lending interest rates hovered above 30% as a result of reforms, why won’t high poverty rate be aggravated by such reforms? Today’s N70,000 minimum wage can either buy you a bag of rice or fill one tank of a small saloon car such as a Toyota Corolla.
The appropriate conclusion is not that economic reforms have produced no benefits. Rather, the reforms have imposed considerable adjustment costs, while the benefits have yet to be distributed sufficiently widely. Their success must therefore be assessed not only by revenue growth, exchange-rate stability and GDP performance, but also by real household incomes, affordable food, employment opportunities, infrastructural availability and access to affordable education and healthcare.
Ultimately, economic reforms should be judged by their capacity to improve the welfare of Nigerian citizens and not only by the rose returns of technical statistical and financial numbers which some suspect to have been sexed-up. Stabilising the macroeconomy is necessary, but it is not a sufficient target of performance measurement and policy impact assessment. The ultimate test of Tinubu’s economic reforms is whether Nigerians can afford decent food, energy and power availability for 24 hours and seven days per week, affordable housing, transportation, healthcare and education without being pushed further into poverty.
Let it be known that there is a distinction between the impact of reforms and the prevailing poverty impacts of Nigeria’s pre-existing structural weaknesses. Therefore, poverty deterioration began before the Tinubu era in May 2023. To that extent, i still stand firmly on my technical premise that all the reforms were desirable. Similar reforms were implemented elsewhere in other emerging and developing economies with minimum poverty acceleration impacts as witnessed in Nigeria.
The crux of the matter as far as the resulting negative policy reform impacts are concerned is their poor implementation sequencing, absence of adequate stakeholder consultations and expert policy inputs, and the critically weak social protection and other impact mitigation measures adopted and implemented for households and firms to cushion their poverty impacts. In other words, the rapid adjustment and inadequate cushioning mechanisms aggravated the hardship thrown up by the reforms. For Nigeria’s core policy makers, the next policy challenge is to design and implement new reform measures to shift the Nigerian policy success narrative from macroeconomic stabilisation to provision of adequate infrastructure, inclusive growth, and productive employment, all of which will create positive measurable poverty reduction impacts.
The way forward requires stronger social protection, productive agricultural financing at single digits interest rates, investment in affordable energy and transportation, employment generation and improved governance and accountability in public expenditure, which has remained largely weak under the Tinubu presidency. Federal and state governments must ensure that increased revenues translate into measurable improvements in human development.
- Dr. Justin Amase is the Managing Director/CEO of Macrostrat Nigeria Limited, a policy, governance and research consultancy firm based in Maitama, Abuja.
SOURCE: National Accord Newspaper