The Centre for the Promotion of Private Enterprise (CPPE) has stated that the first three years of President Bola Ahmed Tinubu’s administration have been largely defined by efforts to rescue the Nigerian economy from severe macroeconomic vulnerabilities and place it on a path of stability and recovery.
According to a review shared by the CEO, Dr Muda Yusuf, a fair assessment of the administration’s performance must be viewed against the backdrop of the economic conditions it inherited in May 2023. At the time, Nigeria faced significant fiscal, monetary and foreign exchange challenges, including acute foreign exchange illiquidity, multiple exchange rates, widespread arbitrage opportunities, declining investor confidence, weak external reserves and mounting pressure on trade finance obligations.
The economic policy centre noted that fiscal conditions were equally troubling, with the extensive use of Ways and Means financing effectively institutionalising monetary financing of fiscal deficits, while the fuel subsidy regime had become a major source of fiscal leakage, corruption and economic distortions.
“The economy was approaching a tipping point as the fiscal, monetary and structural foundations of the prevailing model became increasingly unsustainable. The immediate challenge before the administration was therefore to restore macroeconomic stability, rebuild investor confidence and avert a deeper economic crisis,” CPPE stated.
Reform Measures Anchored on Fuel Subsidy Removal and Exchange Rate Unification
CPPE identified the removal of fuel subsidy and exchange rate unification as the two most consequential reforms undertaken by the administration.
According to the organisation, the elimination of fuel subsidies addressed a major fiscal burden that had encouraged smuggling, rent-seeking and inefficiencies while crowding out productive public investment. The reform, it noted, laid the foundation for a more transparent and sustainable downstream petroleum sector.
Similarly, exchange rate unification addressed longstanding distortions created by the multiple exchange rate system, improving transparency, enhancing price discovery and reducing opportunities for arbitrage.
While acknowledging the necessity of these reforms, CPPE noted that they came with significant adjustment costs.
“The immediate impact was a major inflationary shock. Energy prices surged, transportation and logistics costs increased sharply, production expenses rose significantly and currency depreciation amplified imported inflation pressures. Consequently, real incomes declined, poverty conditions worsened and many households experienced severe cost-of-living pressures,” the organisation said.
Signs of Economic Stabilisation Emerging
Despite the short-term hardships associated with the reforms, CPPE observed that there is growing evidence that the stabilisation agenda is yielding positive outcomes.
The organisation highlighted improvements in Nigeria’s external reserves, which have risen significantly and are approaching the $50 billion threshold. It also noted that the country has maintained a positive trade balance, while investor confidence and exchange rate stability have improved considerably since 2025.
According to CPPE, one of the most significant indicators of progress was the economy’s eleven consecutive months of disinflation from early 2025 through February 2026. Although this trend was interrupted in March 2026 following the Iran–U.S.–Israel conflict, which triggered higher global crude oil prices and renewed inflationary pressures, the earlier moderation demonstrated the effectiveness of stabilisation measures.
The organisation also pointed to remarkable growth in the capital market. The Nigerian Exchange (NGX) All Share Index rose from approximately 55,700 points in 2023 to over 254,000 points in 2026, representing growth of more than 350 percent. Market capitalisation similarly increased from about ₦30 trillion to over ₦160 trillion, reflecting stronger investor confidence and improved market sentiment.
CPPE further noted that the discontinuation of Ways and Means financing has contributed to stronger monetary discipline and greater macroeconomic stability.
Another major milestone identified by the organisation is the emergence of domestic refining capacity, particularly through the Dangote Refinery. According to CPPE, reduced dependence on imported petroleum products has improved foreign exchange conservation, strengthened energy security and contributed positively to exchange rate stability.
“An economy that produces more of what it consumes is inherently more resilient than one that depends excessively on imports,” CPPE stated.
Major Challenges Still Require Urgent Attention
Despite these gains, CPPE stressed that significant challenges remain and must be addressed if the benefits of stabilisation are to be broadly shared.
Foremost among these concerns is the limited transmission of macroeconomic gains into improved welfare outcomes. The organisation noted that inflation remains elevated, purchasing power remains weak and consumer confidence continues to be fragile.
“The policy challenge before government is no longer merely one of economic stabilisation. The priority now is converting reform gains into jobs, higher incomes, lower poverty rates and a better quality of life for Nigerians,” CPPE said.
The organisation also identified insecurity as a major threat to economic recovery and food security. Persistent security challenges continue to affect agricultural productivity, disrupt rural livelihoods, discourage investment and contribute to inflationary pressures.
CPPE warned that insecurity imposes costs that extend beyond economics, creating psychological trauma, weakening social cohesion and undermining public confidence.
In addition, the organisation highlighted several structural constraints affecting competitiveness, including high energy costs, weak infrastructure, logistics bottlenecks, policy inconsistencies and elevated interest rates. It particularly emphasised that the power sector remains one of the most significant barriers to industrial growth and productivity.
Fiscal Sustainability and Governance Remain Critical
The policy centre also raised concerns about fiscal sustainability, noting that although Ways and Means financing has been curtailed, revenue growth has not sufficiently closed the financing gap.
According to CPPE, Nigeria’s public debt rose to ₦159.3 trillion as of December 2025, driven partly by the depreciation of the naira, which increased the domestic value of external debt, as well as the securitisation of legacy Ways and Means liabilities estimated at ₦23 trillion.
The organisation expressed optimism that ongoing tax reforms could strengthen government revenue generation and improve fiscal sustainability.
On governance, CPPE stressed that public trust remains essential to the success of economic reforms. It called for greater fiscal prudence, transparency, accountability and expenditure discipline to reinforce confidence in government policies.
“The long-term sustainability of economic reforms depends on shared sacrifice. Citizens are more likely to support difficult reforms when they perceive that the burden is being shared fairly and that public resources are being managed responsibly,” CPPE noted.
Next Phase Must Focus on Inclusive Growth
Looking ahead, CPPE emphasised that while the first three years of the administration were largely about stabilisation, the next phase must focus on translating macroeconomic gains into inclusive growth and improved living standards.
The organisation called for accelerated investment, enhanced productivity, improved energy security, stronger food systems, industrial competitiveness, job creation and poverty reduction.
“Ultimately, the success of the reform agenda will not be measured solely by reserve accumulation, exchange rate stability or stock market performance. It will be judged by its impact on jobs, incomes, living standards and the quality of life of ordinary Nigerians.
Macroeconomic stability may rescue an economy from the brink, but inclusive prosperity is what secures public confidence, strengthens social cohesion and sustains the reform journey,” CPPE concluded.
