Tinubu reforms stabilized economy, welfare lags – CPPE

Nigeria’s recent economic reforms under President Bola Tinubu have contributed to macroeconomic stabilisation, but improvements in household welfare remain limited, according to a new assessment by the Centre for the Promotion of Private Enterprise (CPPE).

The policy research group noted that while key macroeconomic indicators such as exchange rate stability, fiscal adjustments, and investor sentiment have shown signs of improvement, the benefits have not yet fully translated into improved living standards for most Nigerians.

The report highlights a widening gap between macroeconomic stabilisation and microeconomic wellbeing, pointing to continued pressures on household incomes, rising cost of living, and persistent inflationary challenges.

Since assuming office, President Tinubu’s administration has implemented several major economic reforms, including the removal of fuel subsidies, foreign exchange market unification, and fiscal policy adjustments aimed at improving government revenue and reducing budget deficits.

These reforms have been widely described by economists as structural measures intended to correct long-standing economic distortions and improve long-term sustainability. However, they have also triggered short-term inflationary pressures and increased living costs.

The Centre for the Promotion of Private Enterprise stated that while these policy decisions are beginning to stabilise key macroeconomic variables, the transmission of benefits to households remains weak and uneven.

Inflation continues to be a major concern, particularly food inflation, which has significantly affected household purchasing power. Rising prices of essential goods and services have placed pressure on low- and middle-income households across the country.

Analysts note that wage growth has not kept pace with inflation, resulting in reduced real incomes for many workers. This has contributed to declining consumer spending power and increased economic hardship for vulnerable populations.

Exchange rate reforms have also played a role in improving transparency in the foreign exchange market, but currency depreciation has increased the cost of imported goods, machinery, and raw materials, affecting both businesses and consumers.

The CPPE report suggests that while investor confidence may be gradually improving due to clearer policy direction, structural challenges in production, infrastructure, and productivity continue to limit broad-based economic gains.

Nigeria’s private sector has responded to reforms with mixed outcomes. Some industries have benefited from improved policy clarity, while others continue to struggle with high operating costs, energy constraints, and financing challenges.

Manufacturing firms, in particular, face rising production expenses driven by inflation, foreign exchange volatility, and high energy costs. These factors have limited their ability to expand output or reduce prices for consumers.

The financial sector has experienced adjustments as monetary tightening measures by the Central Bank of Nigeria influence interest rates and credit conditions across the economy.

Higher borrowing costs have made access to credit more expensive for businesses and households, further constraining consumption and investment activity in the short term.

Despite these challenges, economists acknowledge that structural reforms are necessary to address long-standing fiscal and external imbalances that have historically weakened Nigeria’s economic resilience.

The CPPE emphasised the importance of complementary policies to ensure that macroeconomic stability translates into improved welfare outcomes. These include targeted social interventions, productivity-enhancing investments, and expanded support for small and medium-sized enterprises.

The report also highlights the need for improved infrastructure, particularly in power supply, transportation, and logistics, as key enablers of economic productivity and job creation.

Agriculture remains a critical sector for welfare improvement, given its role in employment and food security. However, rising input costs, insecurity in farming regions, and climate-related challenges continue to affect agricultural productivity.

Experts argue that without significant improvements in productivity and industrial capacity, the benefits of macroeconomic stabilisation may take longer to reach households.

The CPPE further notes that social protection mechanisms are essential in cushioning vulnerable populations during periods of economic adjustment. These include cash transfers, food support programmes, and targeted subsidies for essential services.

While reforms have improved Nigeria’s fiscal outlook and strengthened some macroeconomic indicators, the report stresses that economic success should ultimately be measured by improvements in living standards, employment, and income security.

Analysts believe that the current phase of reforms represents a transition period, where short-term adjustment costs are being experienced in anticipation of longer-term gains.

However, the pace at which welfare improvements materialise will depend on the government’s ability to sustain reforms while simultaneously implementing measures that directly support household income and consumption.

The Centre for the Promotion of Private Enterprise concluded that Nigeria’s economic trajectory is stabilising at the macro level, but urged policymakers to focus more intensively on inclusive growth strategies that ensure citizens experience tangible benefits from ongoing reforms.