President Bola Tinubu’s first year in office has been marked by substantial economic reforms and persistent security challenges. His administration has initiated significant policy changes aimed at stabilising the economy, yet the country continues to grapple with high inflation and widespread insecurity.
This report provides a detailed analysis of these developments based on data from BMI’s report titled “Tinubu’s First Year in Power: Reforms, Risks & Nigeria’s Road Ahead.”
Economic Reforms: Tinubu’s government undertook several major economic reforms aimed at reducing fiscal deficits and stabilising the national currency. One of the most impactful policies was the removal of fuel subsidies. This move, while intended to reduce government expenditure and improve fiscal health, led to a sharp increase in petrol prices, contributing to a significant rise in the cost of living for many Nigerians.
Key Economic Statistics:
| Metric | 2022 | 2023 |
|---|---|---|
| Inflation Rate (%) | 15.6 | 25.3 |
| Exchange Rate (NGN/USD) | 740 | 1,800 |
| Fiscal Deficit (% GDP) | 4.1 | 6.3 |
Exchange Rate Unification: The administration also pursued the unification of Nigeria’s multiple exchange rate windows to stabilise the naira. However, despite these efforts, the naira has continued to depreciate against the US dollar. By early 2024, the exchange rate was around NGN 1,800 per USD in the parallel market, reflecting ongoing challenges in the forex market.
Inflation and Fiscal Health: The removal of fuel subsidies and other fiscal measures contributed to a multi-decade high in inflation, which has reached levels not seen in over thirty years. This inflationary spike is largely driven by higher fuel costs, which have a cascading effect on the prices of goods and services, thereby reducing the purchasing power of Nigerians.
The Central Bank of Nigeria (CBN) has responded with monetary tightening measures, including raising interest rates to curb inflation. However, these rate hikes have not yet significantly alleviated inflationary pressures. The fiscal deficit remains wide, projected to persist through 2024 and 2025, partly due to the enduring impact of subsidy removal and the need for increased public spending on infrastructure and security.
Fiscal Deficit Projections:
| Year | Projected Fiscal Deficit (% GDP) |
|---|---|
| 2024 | 5.8 |
| 2025 | 5.6 |
Security Challenges: Insecurity continues to be a major issue under Tinubu’s administration. Despite some improvements, insurgency, kidnapping, and banditry remain prevalent. Data shows a persistent pattern of violence across various states, with fatalities from violent incidents reported in numerous regions. Kidnappings have surged, fueled by economic hardships and the activities of criminal groups.
Key Security Statistics:
| Region | Incidents | Casualties | Kidnappings |
|---|---|---|---|
| North West | 1,661 | 757 | 346 |
| North Central | 1,227 | 1,516 | 270 |
| North East | 479 | 135 | 109 |
| South East | 140 | 139 | 104 |
| South South | 241 | 60 | 143 |
| South West | 211 | 84 | 123 |
The northern regions, particularly North West and North Central Nigeria, remain hotspots for violence, with significant numbers of fatalities reported. The widespread insecurity has limited the government’s capacity to implement further economic reforms and has strained public finances.
Also read: Violent Conflict in Nigeria: An Analysis of President Tinubu’s First Year in Office
Oil and Gas Sector: The oil and gas sector, crucial to Nigeria’s economy, has seen mixed results under Tinubu. While there has been momentum in implementing the Petroleum Industry Act, production levels have struggled. Deepwater fields are seen as critical to future production increases, but challenges remain in ramping up output.
Oil Production Statistics:
| Year | Production (million barrels/day) |
|---|---|
| 2022 | 1.6 |
| 2023 | 1.4 |
| 2024 | (Projected) 1.5 |
Policy Measures and Public Reaction: Tinubu’s administration has implemented several policies aimed at mitigating the negative impacts of economic reforms. These include social intervention programmes designed to support the most vulnerable populations. However, public reaction has been mixed, with widespread protests against the removal of fuel subsidies and the resultant high cost of living.
Future Outlook: Looking ahead, Tinubu’s administration faces the dual challenge of sustaining economic reforms while addressing persistent security threats. Efforts to improve fiscal health and stabilise the naira must be balanced with initiatives to enhance public safety and reduce violence. The administration’s success in these areas will be critical to achieving long-term stability and growth for Nigeria.
President Bola Tinubu’s first year in office has been a period of significant economic reform, marked by the removal of fuel subsidies and efforts to stabilise the naira. However, these changes have also driven inflation to record highs, posing challenges for the average Nigerian. Simultaneously, security issues persist, with insurgency, kidnapping, and banditry continuing to threaten stability.
The road ahead for Nigeria under Tinubu’s leadership will require balancing economic reforms with effective measures to address ongoing security challenges.
