How Nigeria can turn painful reforms to prosperity
…At Tinubu touts reforms
The Nigerian Economic Summit Group (NESG) has said Nigeria must begin to act urgently to transform ongoing economic reforms into sustainable growth and shared prosperity for citizens, warning that failure to consolidate the current phase could erode the hard gains made so far.
The economic group highlighted a seven-point focus area at the ongoing Economic Summit in Abuja on Monday that must underpin the next stage of reforms, which include a renewed focus on industrialisation and enterprise growth, infrastructure development and unlocking investments.
The group also highlighted fiscal sustainability, inclusion, strengthened institutions and improved security as critical drivers for the next phase of the reforms.
According to NESG, these reforms will not only turn to gains for Nigerians but can also unlock the ambitious $1 trillion economy.
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Olaniyi Yusuf, chairman, NESG, in his opening remarks, commended the government for taking ‘courageous steps’ to remove fuel subsidies, unify the foreign exchange market, and initiate tax reforms, but acknowledged that Nigerians are currently in grief for these changes. He stressed that the real test now lies in converting reform gains into tangible improvements in productivity, competitiveness, and inclusion.
“If we stop here, we risk losing the progress that has been so courageously won. The challenge before us is to move decisively into the consolidation phase, embedding reforms in ways that drive jobs, growth, and inclusion, while laying the foundations for long-term transformation that will secure prosperity for every Nigerian,” he said.
He framed Nigeria’s reform journey around three distinct phases: stabilisation, consolidation, and acceleration, calling for deliberate policy action to move from the first to the second phase.
Meanwhile, President Bola Tinubu defended his administration’s sweeping economic reforms, insisting that every policy decision has been guided by “a pursuit of balance between economic logic and public expectation,” even as he acknowledged the pain Nigerians continue to face in the transition period.
Speaking through Vice President Kashim Shettima at the event, the president said the government’s tough choices are beginning to yield tangible results across key sectors — including improved revenue generation, debt management, and macroeconomic stability.
Tinubu said, “There is no single decision we have taken that is not guided by the pursuit of balance between economic logic and public expectation. Every reform we have introduced has emerged from deep reflection, difficult conversations, and the courage to act in the national interest.”
He noted that Nigeria’s economy expanded to $372.8 billion in 2024, up from $309.5 billion in 2023, while total revenue rose from $19.9 billion to $25.2 billion within the same period. The country’s debt-to-GDP ratio, he noted, stood at 38.8 percent, well below the 60 percent limit prescribed by both the Fiscal Responsibility Act and the ECOWAS threshold.
“Our tax-to-GDP ratio has now nudged towards 13.5 percent, up from barely 7 percent a few years ago,” he said.
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“These are not mere statistics; they tell the story of a nation committed to reform and renewal. It shows that our decisions, though tough, are restoring fiscal confidence and investor trust.”
He further disclosed that Nigeria’s fiscal deficit had dropped sharply, with the debt service-to-revenue ratio declining to less than 50 percent, compared to 97 percent before the administration came into office.
Despite the improvements, Shettima admitted that the benefits of these reforms had not yet fully translated into jobs or relief for citizens.
“I admit that this growth has not yet fully translated into enough jobs for our people, but we are closing that gap,” he said, noting that the administration was prioritising agriculture, solid minerals, and small business financing to create sustainable employment.
Among other initiatives, the government has established a ₦200 billion integration fund to support small and medium-scale enterprises (SMEs) and launched the New Hope Local Economy Programme, targeting all 8,809 wards across Nigeria’s 774 local government areas.
Tinubu, through the Minister of Finance and Coordinating Minister of the Economy, also highlighted tax reforms as key to boosting domestic revenue and reducing dependence on oil. He cited the recently enacted Tax Reform Act and new revenue administration laws as major steps in this direction.
“These reforms will take low-income earners off the tax bracket, ensure fairness in corporate taxation, and strengthen digital innovation in tax administration,” he said.
“We are simplifying processes, blocking leakages, and ensuring that every kobo counts.”
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On infrastructure, the president said the government was currently constructing over 2,700 kilometres of superhighways and 440 road projects nationwide, alongside new rail lines and bridges.
He described such investments as “the axis of national prosperity and a pathway to long-term productivity.”
As he declared the summit open on behalf of the President, Shettima reaffirmed Tinubu’s commitment to an economy that is “stable, industrialised, and humanised.”
“We will stabilise prices and the naira, industrialise our economy, humanise governance, and ensure that every citizen feels respected and served,” he concluded.
