Moving Nigeria from macroeconomic stability to household recovery: A letter to President Tinubu

By Isaac Monehin

President Bola Ahmed Tinubu’s administration deserves recognition for undertaking difficult economic reforms aimed at correcting longstanding structural distortions in the Nigerian economy. The removal of petrol subsidies, exchange-rate reforms, efforts to improve government revenue and the pursuit of fiscal and monetary stability were interventions that successive administrations had either postponed or implemented inadequately.

The administration has also introduced or proposed measures intended to cushion the effects of these reforms. These include the Presidential Compressed Natural Gas Initiative, student-loan reforms, the Consumer Credit Scheme, the Nigeria Education Loan Fund, the Renewed Hope Infrastructure Development Fund, expanded social-investment initiatives, support for small businesses and efforts to improve food production and agricultural financing.

The use of savings from subsidy reform to support states and local governments, as well as investments in infrastructure, transport and energy, also deserves acknowledgement.

These reforms were not without justification. Nigeria could not indefinitely sustain a system characterised by enormous subsidy expenditures, multiple exchange rates, fiscal leakages, weak public revenues and persistent distortions in resource allocation. However, economic reforms must ultimately be judged by the improvements they deliver to the lives of citizens.

The central challenge facing the administration today is therefore no longer simply whether the reforms are producing macroeconomic improvements. It is whether these improvements are translating into better living conditions for ordinary Nigerians. The Nigerian economy cannot be considered fully recovered when GDP is growing, foreign-exchange reserves are improving and government revenues are increasing, while millions of households struggle to afford food, transportation, electricity, education and healthcare.

There is an important distinction between economic recovery at the aggregate level and economic recovery at the household level. Nigeria appears to have made progress towards the former. The challenge is to accelerate the latter. The administration should also be given a fair opportunity to complete and consolidate its reform programme. Three years is not enough time to resolve the accumulated economic problems created over decades. No serious reform comes without pain, and the transition from a distorted economic system to a more productive one will inevitably impose costs before benefits become widely visible. Patience, however, must be accompanied by transparency, accountability and measurable progress.

The next phase of the Tinubu reforms must therefore move decisively from macroeconomic stabilisation to household economic recovery. I propose a National Household Economic Recovery Programme (NHERP), a coordinated, time-bound intervention designed to ensure that the benefits of economic reforms reach households, businesses and productive sectors of the economy.

The programme should build on measures already being taken or proposed by the administration and should be organised around strategic priorities.
Make food affordability the immediate national priority. Food inflation is perhaps the most direct channel through which economic hardship is experienced by ordinary Nigerians. For low-income households, food accounts for a substantial proportion of monthly expenditure. Consequently, even when headline inflation moderates, persistently high food prices can continue to erode living standards.

Government must therefore move beyond occasional interventions and develop a comprehensive agricultural productivity and food-affordability strategy. Existing efforts to expand agricultural financing, support mechanisation, improve access to inputs and establish food-security initiatives should be strengthened, better coordinated and transparently monitored.

Specific interventions should include subsidised fertiliser, improved seedlings and agricultural inputs for smallholder farmers; mechanisation services through agricultural equipment-leasing centres; expansion of irrigation and dry-season farming; establishment of agricultural production zones with adequate security; investment in storage facilities, silos and cold-chain infrastructure; rehabilitation of rural roads connecting farming communities to markets; and affordable financing for agricultural processing and distribution businesses.

The administration’s agricultural support and food-security programmes should also be expanded, with priority given to productive inputs rather than indiscriminate consumption subsidies.
Government should consider a temporary food-affordability programme targeting essential staples such as rice, maize, beans, cassava and other locally consumed foods.

The emphasis should be on reducing the cost of production and distribution rather than creating another permanent consumption subsidy. Initial interventions should commence immediately, with early measures within 100 days and measurable production and distribution improvements within six to 12 months. Progress should be assessed through growth in domestic production of selected staple foods, reductions in farm-gate production costs and post-harvest losses, reductions in the cost of a defined basket of essential food items, the number of farmers receiving productive support and the volume of food reaching urban markets.

Establish a credible and adequately funded social-protection system. The removal of fuel subsidies and exchange-rate reforms imposed significant adjustment costs on households.
It is therefore economically and socially necessary to establish a credible mechanism for cushioning the most vulnerable citizens.

The administration’s cash-transfer initiatives, state-level support funded partly through increased federal revenues and other social-investment programmes provide a foundation, but they must be better targeted, independently verified and insulated from political manipulation. I propose a targeted household-support programme covering monthly cash transfers to the poorest households, transportation assistance for low-income workers, expanded school-feeding programmes, affordable primary healthcare for vulnerable households, and special assistance for elderly citizens and persons with disabilities.

The National Social Register should be cleaned up, independently verified and continuously updated. Cash transfers should be regular, predictable and sufficient to make a meaningful difference.
For illustration, providing N20,000 monthly to eight million verified vulnerable households would cost approximately N1.92 trillion annually, excluding administration and programme monitoring. The proposed implementation cost is N2.0–2.5 trillion annually.

The first 90 days should be used for beneficiary verification and initial disbursement, with full programme operation within six months. Performance should be measured by the number of verified households receiving support, the percentage of transfers reaching beneficiaries on schedule, reductions in food insecurity among beneficiary households, reductions in school absenteeism attributable to economic hardship, and independent verification of programme beneficiaries and expenditure.

The important principle is that social protection should be viewed as an economic-stabilisation instrument, not merely an act of government generosity. Make employment creation the principal measure of economic success
GDP growth without corresponding employment growth will not substantially reduce poverty.

Nigeria requires an aggressive employment-generation strategy focused on sectors with high employment multipliers.

Priority sectors should include agro-processing and food manufacturing, textiles and garments, construction and building materials, solid-minerals processing, light manufacturing, digital services, renewable energy, tourism and hospitality. Government should build on its support for small businesses, the Consumer Credit Scheme, the Bank of Industry and other development-finance initiatives by introducing employment-linked incentives for businesses that demonstrate measurable increases in Nigerian employment.

For example, access to subsidised credit, tax incentives and investment support could be tied to the number of additional workers employed, the quality of jobs created and the sustainability of those jobs. We must move away from rewarding investment announcements to rewarding actual investments, production and employment.

I would also recommend a national SME expansion programme that provides credit guarantees, business-development support and technical assistance to viable small businesses.

The proposed fiscal allocation is N500 billion–N800 billion annually, excluding the larger volume of private lending mobilised through credit guarantees.
The programme should be launched within six months, with measurable employment expansion within 12–24 months. Performance should be assessed through the number of additional formal jobs created, the number of SMEs accessing productive financing, growth in manufacturing-capacity utilisation, increases in non-oil exports, the number of businesses graduating from micro to small and medium-scale operations, and the survival rate of supported businesses after two years.

Reduce the cost of electricity and energy
Electricity is a major determinant of the cost of doing business in Nigeria. Manufacturers, traders, small businesses and households spend enormous amounts on alternative energy because of unreliable public electricity supply. This expenditure increases production costs, reduces competitiveness and ultimately raises consumer prices. The administration’s efforts to improve the power sector, expand gas supply, promote renewable energy and support compressed natural gas should be accelerated and integrated into a broader energy strategy.

Government must accelerate investments in generation, transmission and distribution simultaneously. Priority interventions should include the rehabilitation of existing generating plants, improved gas supply to thermal power stations, expansion of transmission lines and substations, embedded generation for industrial and commercial clusters, solar and battery-storage solutions for rural communities and small businesses, improved distribution infrastructure and nationwide metering.

The Presidential Compressed Natural Gas Initiative should be expanded to reduce transport and energy costs. Electricity pricing should be transparent and commercially sustainable, with targeted protection for vulnerable consumers.

The objective should be to increase dependable electricity delivered to consumers, rather than merely announcing additional installed generation capacity. The proposed federal and state public investment envelope is N1.5–2.5 trillion annually, supplemented by substantial private-sector investment.
Immediate rehabilitation and gas-supply interventions should begin at once, with significant improvements within 12–24 months and sustained expansion over four years.

Progress should be measured through average daily electricity supply to households and businesses, reductions in grid-generation and transmission losses, increases in dependable electricity delivered, the number of industrial clusters receiving reliable electricity, reductions in businesses’ expenditure on self-generation, and increases in electricity connections and metering.

Reduce transportation and distribution costs

The cost of transporting agricultural produce and manufactured goods is an important component of the final prices paid by consumers. Even when farm-production costs decline, inefficient distribution can prevent these savings from reaching households. Government should prioritise the rehabilitation of major agricultural and industrial roads, the expansion of rail-freight services, the development of efficient distribution centres, the improvement of inland waterways, the removal of illegal roadblocks and multiple taxation, and the modernisation of logistics and warehousing infrastructure.

It should also expand affordable mass transit and CNG-powered transportation under the administration’s ongoing transport initiatives. Special attention should be given to major food-producing corridors linking agricultural communities to large urban consumption centres. The proposed annual public investment envelope is N1.0–1.5 trillion, in addition to existing infrastructure budgets and private investment. Priority corridors should be identified immediately, with initial improvements within six to 12 months and major logistics benefits within two to three years.

Performance should be measured through reductions in average transportation costs on selected routes, farm-to-market delivery times and post-harvest losses, as well as the number of kilometres of priority roads rehabilitated and the increase in agricultural freight transported by rail and waterways. Improve access to affordable credit for productive businesses. Nigeria’s high-interest-rate environment has constrained investment, particularly among SMEs and manufacturers. While monetary policy must remain focused on price stability, government should complement the Central Bank’s efforts with targeted productive-sector financing.
The administration’s efforts through development-finance institutions, the Bank of Industry, the Consumer Credit Scheme and proposed credit reforms should be expanded, transparently administered and linked to measurable productive outcomes.

I recommend dedicated financing facilities for agriculture, manufacturing, export-oriented businesses, SMEs, renewable energy and industrial infrastructure. Credit facilities should be transparently administered, competitively allocated and linked to measurable productive outcomes.

Government should also strengthen credit-guarantee mechanisms to reduce the risks faced by commercial banks when lending to viable smaller businesses.
The proposed annual fiscal support and credit-guarantee provisioning is N300–500 billion, with the objective of mobilising substantially larger private-sector lending.

The facilities should be operationalised within six months, with measurable increases in productive investment within 12–24 months. Performance indicators should include the volume of credit reaching productive sectors, average lending rates for supported businesses, the number of SMEs financed, increases in business investment and output, and loan-repayment and default rates.

Ensure that increased government revenues translate into visible public investment

One of the most important consequences of subsidy removal and improved government revenues should be better public infrastructure and social services.
Nigerians need to see tangible evidence that their sacrifices are producing results.

The administration’s use of increased revenues to support subnational governments and fund infrastructure should be accompanied by a publicly accessible National Revenue and Expenditure Accountability Dashboard. The dashboard should disclose additional revenues attributable to subsidy removal, additional revenues from improved oil production, additional tax revenues, federal allocations to infrastructure, expenditure on social protection, projects completed and their locations, cost overruns and implementation delays.
It should be independently audited and updated quarterly.

Federal and state governments should also publish the specific development projects financed from increased revenues. The proposed annual allocation for monitoring, digital infrastructure and independent verification is N20–30 billion. The dashboard should be operational within 100 days. Performance should be measured through the quarterly publication of revenue and expenditure information, the percentage of priority projects independently verified, the percentage of projects completed within budget and schedule, the publication of state-level utilisation of additional revenues, and the number of identified financial irregularities investigated and resolved. Transparency is essential to rebuilding public confidence in the reform process.

Introduce a National Purchasing-Power Recovery Programme

Ultimately, the success of economic reforms should be reflected in the ability of Nigerians to purchase more goods and services with their earnings.
A reduction in inflation does not necessarily mean an improvement in purchasing power. If prices rise by 10% rather than 25%, inflation has moderated, but the cost of living has not declined. What matters is the relationship between household income and the cost of essential goods and services.

Government should therefore establish a National Purchasing-Power Recovery Programme incorporating periodic reviews of the minimum wage, effective implementation of wage agreements, temporary transportation assistance for low-income workers, support for pensioners whose real incomes have been eroded, and measures to improve access to affordable education and healthcare.

It should also promote productivity-linked wage growth in the public and private sectors and expand affordable credit and consumer-finance initiatives while preventing excessive household indebtedness.

The objective should be to ensure that real household incomes grow consistently. The proposed annual fiscal provision is N300–500 billion, excluding the recurrent wage obligations of federal and state governments. Initial interventions should begin within six months, with measurable improvements in real household incomes over 12–18 months.

Performance should be assessed through growth in real wages and median household income, changes in household expenditure on food, transportation and energy, reductions in the proportion of households experiencing severe food insecurity, and changes in poverty incidence.

What would the entire programme cost?

The proposed National Household Economic Recovery Programme requires substantial resources.
The indicative annual public-sector financing envelope includes N1.5–2.5 trillion for food production and affordability; N2.0–2.5 trillion for targeted social protection; N500–800 billion for employment and SME development; N1.5–2.5 trillion for electricity infrastructure; N1.0–1.5 trillion for transportation and logistics; N300–500 billion for productive-sector credit support; N20–30 billion for revenue transparency and monitoring; and N300–500 billion for purchasing-power support. The total would be approximately N7.1–10.8 trillion annually.

These figures are indicative planning estimates, not established project budgets or additional expenditure requirements already approved by government.
They represent a proposed programme envelope. Some components should be financed through the reprioritisation of existing budget allocations, while others would require new funding. There must also be safeguards against double-counting, particularly where agricultural support, SME financing and infrastructure spending overlap with existing programmes.

The Federal Government should commission detailed costing, establish eligibility criteria and publish implementation plans before committing public resources. The programme should be designed to mobilise private investment alongside public expenditure, especially in electricity, logistics, agriculture and manufacturing. Where will the money come from? The programme should not be financed primarily through additional borrowing.
Nigeria must avoid replacing one fiscal distortion with another. I propose six financing channels.

First, government should undertake a comprehensive expenditure review to identify wasteful subsidies, duplicative programmes, administrative overheads and low-priority projects. Resources should be redirected towards interventions with demonstrably higher economic and social returns.

Second, Nigeria must improve oil production and revenue collection by addressing oil theft, production inefficiencies and revenue leakages. Additional oil revenues should be channelled transparently towards productive infrastructure and social protection.

Third, government should improve tax administration by broadening the effective tax base, improving compliance and reducing evasion rather than imposing disproportionate burdens on already struggling households and small businesses.

Fourth, private capital should finance commercially viable electricity, transport, storage and industrial infrastructure through public-private partnerships.

Fifth, the World Bank, African Development Bank and other development institutions should be approached for long-term financing of carefully selected infrastructure and human-development projects.

Sixth, long-term infrastructure bonds and properly structured pension-fund investments can support projects with predictable revenue streams.
Borrowing should be restricted to productive investments capable of generating economic returns, not recurrent consumption.

How soon should Nigerians expect results?

The programme must have a clear implementation timetable. During the first 100 days, the principal objective should be immediate household relief and the commencement of priority interventions. The expected outcomes should include regular cash transfers, agricultural support and initial reductions in selected distribution costs. Within six to 12 months, the focus should be food production, energy improvements and business expansion, with food-price stabilisation, improved electricity supply and stronger productive activity as expected outcomes.
Within 12–24 months, the focus should shift towards industrial expansion and employment creation, leading to improved real incomes, more jobs and better household purchasing power.

Over two to four years, sustained productivity and inclusive economic growth should produce measurable poverty reduction and improved living standards. These are proposed policy milestones, not guaranteed economic forecasts. There is an important distinction between reducing inflation and reducing prices. If inflation falls from 20% to 10%, prices are still increasing, only at a slower rate. For Nigerians to experience actual reductions in food prices, the supply of essential commodities must increase sufficiently relative to demand. Similarly, purchasing power improves only when income growth exceeds the increase in the cost of living.

Meaningful poverty reduction requires sustained improvements in employment, productivity, household incomes and access to essential services.
Government should therefore avoid promising that poverty will disappear within a few months.

Nigerians should also understand that three years is not enough time to solve the myriad economic problems accumulated over decades. Rebuilding productive capacity, restoring investor confidence, improving infrastructure, reducing insecurity and expanding employment require sustained effort over several years.

No reform comes without pain. The removal of entrenched distortions can initially worsen living conditions before the benefits of a more efficient system become visible. Nigerians should be patient with the government while demanding honesty, accountability and evidence of progress.

However, patience must not become an excuse for complacency. Nigerians should begin to experience visible improvements in essential living conditions within the first six to 12 months of serious implementation, while deeper gains in productivity, employment and poverty reduction may reasonably require two to four years or longer.

Establish a National Household Welfare Scorecard

One of the weaknesses of economic policy evaluation in Nigeria is the tendency to concentrate on aggregate indicators without sufficiently measuring household outcomes. Government regularly discusses GDP growth, foreign-exchange reserves, inflation, government revenues and fiscal deficits. These are important indicators, but they do not adequately capture the everyday economic experiences of citizens.

I propose that the Federal Government introduce a quarterly National Household Welfare Scorecard.

It should measure food affordability through quarterly reductions in the real cost of a defined essential food basket; food security through reductions in the number of households experiencing moderate and severe food insecurity; real household income through sustained growth above household inflation; employment through quarterly increases in productive and adequately remunerated employment; electricity through increases in dependable hours of electricity supplied; transportation through reductions in selected agricultural and industrial logistics costs; poverty through annual reductions in monetary and multidimensional poverty; social protection through the percentage of verified beneficiaries receiving transfers on schedule; and SME development through increases in productive lending, output and business survival.

The National Bureau of Statistics should independently validate the indicators, with the National Economic Council coordinating implementation across federal and state governments. The scorecard should be publicly accessible. This would shift the national economic conversation from what government says it has achieved to what Nigerians can actually demonstrate that they have gained.

Should Nigeria return to fuel subsidies?

The question of fuel subsidy deserves a pragmatic rather than ideological response. I do not recommend a wholesale return to the former subsidy regime. Its fiscal costs, leakages, distortions and opportunities for corruption made it economically unsustainable. However, neither should government rule out temporary and targeted interventions simply because the previous subsidy arrangement failed.

The administration’s efforts to promote CNG, expand mass transportation and reduce energy costs demonstrate that alternatives to the old subsidy system are possible, but these initiatives must be implemented quickly and at sufficient scale. A government that undertakes major economic reforms must retain the flexibility to protect vulnerable households against severe adjustment shocks.

Targeted transportation assistance, agricultural energy support and temporary food vouchers could provide relief without recreating the structural weaknesses of the former subsidy system.
Any such intervention must have a clearly defined funding limit, transparent beneficiaries and an expiration date. The guiding principle should be social protection without fiscal recklessness.

The political-economy dimension: Government must rebuild public confidence

Economic reforms are not implemented in a political vacuum.They require public understanding, confidence and a reasonable expectation that sacrifices will produce tangible benefits.
Nigerians have endured substantial economic adjustments. Many households have exhausted their savings, reduced consumption, withdrawn children from certain educational opportunities and struggled to maintain basic living standards. Government cannot indefinitely ask citizens to endure present hardship in anticipation of an uncertain future.

There must be a credible social contract.
Citizens should be able to see a connection between the sacrifices they make and the improvements government delivers. This requires better communication, transparency, accountability and responsiveness to public concerns. It also requires acknowledging policy failures and making timely corrections. The administration must be prepared to distinguish between reforms that should be sustained and implementation strategies that require adjustment. There is nothing inconsistent about retaining sound macroeconomic reforms while modifying the policies through which their benefits are transmitted to households.

Indeed, that is what intelligent economic management requires. Nigerians, for their part, should recognise that the administration inherited deep structural problems and that three years cannot reasonably be expected to resolve every economic challenge. Patience is necessary, but it should be informed patience: citizens should support reforms that are sound, question policies that are failing and insist that public resources produce visible results.

The real test of the Tinubu reforms

I do not believe Nigeria should abandon the fundamental economic reforms already undertaken. The correction of major macroeconomic distortions was necessary, and the Tinubu administration deserves credit for taking decisions that previous governments avoided.

However, macroeconomic stability is a means to an end, not an end in itself. The next phase must deliberately focus on three outcomes: affordable living, productive employment and shared prosperity. Nigerians should be able to afford food, transportation, electricity, education and healthcare. They should have opportunities to earn sustainable incomes through productive economic activities. The benefits of economic growth should reach households across income groups and geographical locations.

I would give the Tinubu administration the next 12 months to demonstrate convincing and independently verifiable improvements in food affordability, real incomes, employment and electricity supply.

Poverty reduction will take longer, but the process must become visible within that period. The administration has spent considerable political capital undertaking difficult economic reforms. It must now spend equal political capital ensuring that the benefits reach ordinary Nigerians. Nigerians should be patient with the government because no serious reform comes without pain, and three years is not enough to solve the myriad economic problems accumulated over decades.

But patience must be matched by performance. The government must communicate honestly, correct mistakes promptly and demonstrate that today’s sacrifices are financing tomorrow’s prosperity. Ultimately, the success of economic reforms should not be measured primarily by how much government saves, how much foreign exchange accumulates or how impressive GDP growth becomes.

It should be measured by how much better the average Nigerian is able to live. That is the real test of reform. That is the standard by which the Tinubu administration should be judged. And that is the economic dividend Nigerians deserve.

Isaac Monehin is an economist. He is a former Executive Director of Energy Bank Ghana and a one-time Senior Special Assistant on PPP to Governor Olusegun Mimiko of Ondo State.