The Discourse: Tinubu’s Economic Policies: Breeding Poverty, Unemployment, And Hardship In Nigeria
- By Wahab Abiona
Since assuming office in 29th May 2023, President Bola Ahmed Tinubu’s administration has initiated a series of radical economic reforms that have significantly altered the Nigerian economic landscape. These policies, which include the removal of fuel subsidies, the floating of the naira, increased electricity tariffs, import duties, higher interest rates, new tax reform, and the imposition of new financial levies, were introduced to stabilise public finances and attract investment.
In any economy, the primary roles of economic policies are to promote economic growth, ensure price stability, maintain full employment, redistribute income and wealth, improve the balance of payments, and ensure sustainable development.
However, for many Nigerians, these reforms have resulted in unprecedented hardship, escalating poverty, skyrocketing prices, and rising unemployment with available statistics, though the government is trying to manipulate data, claiming the government met bad economic situation, unfortunately, there is no hiding place because Nigerians are over taxed from all manners to generate Income into the Federation Account and huge borrowing that never impacted on the life of average Nigerian.
One of the most impactful decisions made by the Tinubu administration was the removal of the fuel subsidy. Before this action, petrol was sold at ₦185 per litre. Following the removal, pump prices surged to above ₦850 per litre, reflecting a staggering 360% increase. The result has been an immediate and painful rise in the cost of living. Transportation costs doubled in most urban and rural areas, with commuters paying 1250% more for basic travel.
The increase in fuel prices triggered a ripple effect on the prices of goods and services across the economy. According to the National Bureau of Statistics (NBS), food inflation climbed to 40.66% in May 2024, the highest figure in two decades. Essential food items such as rice, which cost ₦35,000 per 50kg bag in April 2023, now sell for over ₦80,000, which shows around 130% increase. This surge in prices has severely eroded household purchasing power, pushing millions of Nigerians into abject poverty.
Closely linked to this is the decision to float the naira. The exchange rate moved from ₦471/$1 in May 2023 to over ₦1,550/$1 by July 2024, a 230% devaluation. This policy, intended to unify the foreign exchange market and eliminate distortions, instead unleashed severe volatility.
As Nigeria imports a significant portion of its food, pharmaceuticals, and manufacturing inputs, the devaluation dramatically increased the cost of imports, worsening inflationary pressures. This has indirectly increased the cost of local production, even above imported items which has shut down most of the local firms and made the companies reduce workers or lay them off completely.
The World Bank has noted that the naira’s sharp depreciation contributed significantly to rising food prices and inflation, making basic goods inaccessible to low-income earners and most citizens with no income at all. Despite these measures, the anticipated influx of foreign investment has not materialised.
The NBS Capital Importation Report showed a decline in capital inflow from $5.3 billion in 2022 to $3.9 billion in 2023, representing a 26% drop, suggesting a reduction in investor confidence in the Nigerian economy. Import duties in Nigeria have significantly contributed to rising prices and economic hardship, particularly under this administration.
As the government increased tariffs on imported goods, with some reaching up to 35% to boost revenue and protect local industries, the unintended consequence has been a sharp rise in the cost of essential items. Coupled with the naira’s steep depreciation has made import costs have tripled in local currency terms.
Businesses reliant on imported raw materials have also struggled, with thousands of SMEs closing due to high input costs. While customs revenue is projected to surpass ₦6 trillion in 2025, the burden on consumers and small businesses has deepened the cost-of-living crisis and weakened economic resilience.
Another burden imposed on citizens is the hike in electricity tariffs. Previously, consumers paid an average of ₦68 per kilowatt-hour. By April 2024, Band A customers were paying ₦280/kWh, a 312% increase. This steep rise has forced many small businesses to cut down on operations or close entirely due to unaffordable energy bills. Despite the increased tariffs, power supply remains irregular, averaging 10 to 12 hours daily.
Consequently, many households and businesses continue to rely on generators powered by diesel, which now costs over ₦1,200 per litre. According to the Manufacturers Association of Nigeria (MAN), over 5,000 small and medium-scale enterprises (SMEs) shut down between June 2023 and March 2024, citing high energy, fuel costs as primary reasons and costs of production in general.
The cumulative impacts of these policies have manifested in worsening economic indicators. The unemployment rate, though officially pegged at 4.2% under a new methodology, is widely contested. Broader metrics that include underemployment suggest the rate is closer to 30%, given the mass layoffs in both formal and informal sectors.
The World Bank estimates that over 24 million Nigerians fell into poverty between May 2023 and May 2024. Real wages have declined by over 30%, and the national minimum wage of ₦70,000, equivalent to roughly 45.20 per month at the current exchange rate, has become insufficient to meet basic needs. Although, the federal government of Nigeria failed to pay the said new minimum wage, instead it added ₦40,000 to their wage as against progressive computation across levels (level 1-17).
According to a World Bank report released in July 2024, 63% of Nigerians, or approximately 110 million, are now either poor or at risk of falling into poverty. This figure includes both rural dwellers and urban workers (48% and 75%) struggling to cope with higher transport and food costs.
Additionally, the introduction of multiple levies and service charges has further strained the finances of ordinary Nigerians. These include a cybersecurity levy on electronic bank transactions, stamp duties on Point of Sale (POS) transactions, and taxes on telecom services.
The effective increase in the cost of basic financial services by 12–15% disproportionately affects low-income earners who rely on these services for day-to-day activities. These hidden taxes have also hurt micro-entrepreneurs, mobile money operators, and informal retailers who depend on digital payment systems.
Despite government efforts to mitigate the impact fuel subsidy removal through interventions like conditional cash transfers, the reach has been below par due to its limit both in scope and efficiency. The ₦8,000 monthly cash transfer programme, announced in mid-2023, was targeted at less than 10 million Nigerians which is only a fraction of those affected by rising prices and job losses. Furthermore, implementation has been fraught with logistical delays, bureaucratic bottleneck and re-occurring questions of transparency over it.
An increase in Nigeria’s Monetary Policy Rate (MPR), which rose from 18.75% in mid 2023 to almost 27% by Q2 2025, has had significant effects on employment, small and medium-sized enterprises (SMEs) and poverty level across board. As borrowing costs rose by over 700 basis points, access to credit for businesses sharply declined.
This led to reduced private sector investments, particularly in sectors like manufacturing, real estate, construction and even, most petty traders who solely relied on borrowing from banks. As a result, job creation slowed and unemployment worsened, contributing to a youth unemployment rate that remained around 30% as of early 2025. Informal sector workers were also heavily impacted, with small traders and artisans reporting income drops of 20–35% due to reduced consumer spending.
For SMEs, the impact was huge. With commercial lending rates climbing to 30–35%, over 78% of SMEs reported being unable to access formal credit, as bankers are not doing core banking services again (accepting deposits and lending). Many were forced to scale down operations or halt expansion plans altogether. In Lagos and Kano alone, SME closures rose by 18% between Q4 2023 and Q1 2025. The rise in the MPR significantly weakened capital formation in Nigeria’s most economically active sectors (SMEDAN’s 2024 survey).
As Nigerians continue to bear the brunt of these reforms, public discontent has grown. Protests have erupted in various states, labour unions have staged multiple strikes, and market women, civil society organisations, and even religious groups have voiced their dissatisfaction.
While economic reform is necessary for economic stability, the welfare of the people is much more important, especially in the area of food security, health care services, affordable transport system, security of life and property, amongst others.
These policies failed due to poor coordination, and lack of adequate cushioning for vulnerable populations, a lack of transparency and accountability, corruption, and embezzlement. The cumulative effect of fuel subsidy removal, currency devaluation, electricity tariff hikes, high interest rates, and additional levies has entrenched economic hardship across all strata of Nigerian society, with no immediate relief in sight.
As a government whose main essence of power is to work assiduously for the security and welfare of its people, implementing fuel subsidy removal, naira devaluation, exchange rate unification, hike in electricity tariff and rising MPR almost at the same time is not only a stiff economic measures. It is also an extreme insensitivity to citizens plights.
In order to return to a viable society where productivity, growth and stability in both micro and macro economy will become visible, there is a need to return the MPR to mid-2023 era and make the implementation of reforms as listed above a phase oriented. Even in advanced economies across the world, there is a room for subsidy for some important sectors like education food, healthcare, transportation among others.
A stitch in time, they say, saves nine.
- Abiona is a lawyer, social media commentator and public affairs analyst.
The opinions expressed in this publication are solely those of the author. It does not represent the editorial position or opinion of OSUN DEFENDER.
