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Since May 2023, the President Bola Ahmed Tinubu administration has introduced sweeping economic reforms that have seen government revenues hit a record high…
From billions of dollars saved from the fuel subsidy removal to a remarkable surge in non-oil revenue, the federal government now rakes in more money in addition to a series of borrowings running into trillions of naira.
Despite this leap in public coffers, which the government says it is funnelling into infrastructural projects, payment of the new minimum wage and social intervention programmes, critical financial obligations remain unmet.
Among others, the 2024 capital expenditure was extended by one full year due to low performance; implementation of the capital component of the 2025 budget has been suspended, leaving ministries, departments and agencies in limbo; contractors are owed about N2trn for projects already executed; constituency projects of federal lawmakers have been slashed, while civil servants endure unpaid promotion arrears and staggered payment of the 35% wage award introduced to cushion the impact of inflation-triggered high cost of living.
Economic analysts have blamed this fiscal conundrum on ineffective utilisation of revenue, lack of transparency in public spending and high cost of governance.
Efforts to get reaction from the Presidency on the matter were not successful as Bayo Onanuga, Special Adviser to the President on Information and Strategy, could not be reached on phone.
Also, Dr Daniel Bwala, the Special Adviser to the President on Policy Communications’ number could not be reached. Messages sent to their numbers were yet to be replied to as at the time of filing this report.
Higher revenues, more fiscal crises
The federal government has saved substantial amounts since the withdrawal of the fuel subsidy, which used to cost about N380bn monthly. In the first quarter of 2025 alone, the government revenue from petroleum savings increased by over 500 per cent from N154bn to N836bn and the windfall is projected to exceed N11trn between 2023 and 2025.
The growth in oil earnings has fattened the Federation Account, with the federal, state and local governments’ allocations almost double the amount they got before subsidy removal.
The Chairman, Federal Inland Revenue Service (FIRS), Dr Zacch Adedeji, recently told State House correspondents that federal revenue had risen astronomically within two years, hitting N3.64trn in September 2025 alone from N711bn recorded in May 2023. He noted that non-oil revenue grew from N151bn to N1.06trn, oil taxes rose to N644bn from N96bn, while Value Added Tax (VAT) skyrocketed to N723bn from N218bn during the period.
In May, the Nigeria Customs Service said it realised N1.3trn in the first quarter of 2025, more than 100% of the N600bn it recorded during the same time in 2023. By the first half of the year, the Service had collected N3.68trn, outpacing its target by N390bn.
In September, the presidency disclosed that Nigeria generated N20.6trn in revenue between January and August5 2025, up from N14.6trn recorded in the same period the previous year. It attributed the haul to reforms aimed at tightening compliance, broadening the tax base and digitising collection, stressing that revenues from non-oil sources such as the manufacturing sector, telecommunications services, tourism, real estate and banking now account for three out of every four naira the government earns.
At the 10th edition of the Nigeria Mining Week 2025 held in Abuja recently, the President, represented by the Secretary to the Government of the Federation, Senator George Akume, revealed that revenue from the mining sector rebounded by over 600%, swinging from N6bn recorded in 2023 to N38bn in 2024. The sector is also said to have attracted over $800 million in foreign investment within this period.
Revenue from the blue economy has equally witnessed significant growth. In 2023, agencies under the Ministry of Marine and Blue Economy generated about N700.79bn, but by the end of 2024, the figure nearly doubled to N1.3trn.
It is also noteworthy that external reserves have seen an upswing from $35bn in 2023 to $43.17bn in October 2025 and are projected to rise steadily, bolstered by higher oil export earnings, increased diaspora remittances and a favourable trade surplus.
In spite of the revenue increase, the government has fallen short in meeting some of its key financial commitments. For two consecutive days during the week, local contractors under the aegis of the All Indigenous Contractors Association of Nigeria (AICAN) blocked the main entrance to the National Assembly, forcing lawmakers, staff and visitors to seek alternate routes to access the premises.
The National President of AICAN, Jackson Ifeanyi Nwosu, said the federal government had failed to pay contractors for capital projects executed since 2024, leaving many of them bankrupt.
“We didn’t just start this protest yesterday (Tuesday). We started months ago. This government owes us and they promised to pay. Since then, it’s been promises and failure, promises and failure. We can’t continue like this. We can’t feed our families anymore,” Nwosu stated, adding that the contractors executed several infrastructural projects, including schools, roads, boreholes, markets, and ICT centres across the country.
Similarly, constituency projects for federal lawmakers have been slashed by half to N500m. At a town hall meeting with his constituents, Yusuf Gagdi, a member of the House of Representatives representing Pankshin/Kanke/Kanam Federal Constituency of Plateau State, expressed concern over the government’s failure to release funds for capital projects in the 2025 fiscal year.
He explained that although President Tinubu had initially approved an intervention of N1bn constituency projects for each member of the House of Representatives, the allocation was recently halved due to funding challenges.
“I have never received constituency projects worth more than N125m until this year, when the President increased the intervention from N125m to N1bn per House member. It was only last week that Mr. President reached out to the Speaker of the House of Representatives, saying that the 2025 budget cannot be funded. Then Mr. President reduced our constituency intervention project from N1bn to N500m,” Gagdi said.
A fortnight ago, civil servants under the platform of the Federal Workers Forum (FWF) appealed to the government to pay their three-month outstanding wage award. The group, in a statement signed by its National Coordinator, Comrade Andrew Emelieze, complained that the payment had been inconsistent and appealed to the government to clear the backlog of promotion arrears.
“The refusal of the federal government to pay up the balance of the outstanding three months’ wage award as promised by the Accountant-General of the Federation has shown clearly how our government has been treating its workers. The same has also been the case for backlogs of arrears owed to the federal workers, especially promotion arrears; in some cases, over ten years of backlog are owed to the federal workers in Nigeria.
“The payment of N35, 000 wage award was put in place after workers mounted pressure on the government to pay a cost-of-living allowance after the removal of the fuel subsidy and the deliberate, forceful devaluation of our national currency by the federal government,” the statement partly read.
In an interview recently, the Foreign Minister, Yusuf Maitama Tuggar, alluded to funding as part of the reasons for the delay in the appointment of ambassadors. Other reasons he cited were the need for the President to focus on economic reforms, currency fluctuation and currency conversion challenges faced by missions abroad.
“This (fluctuation) further compounded the issue of funding missions and also funding the sending out of ambassadors,” the minister said.
‘MDAs partially grounded over non-release of funds’
Workers in federal Ministries, Departments and Agencies (MDAs) have decried non release of capital expenditure in the year 2025.
They also alleged that the release of recurrent expenditure has been epileptic, noting that since January 2025, not much has been achieved in terms of fulfilling their mandates.
They also told Weekend Trust that core ministries have been starved of capital expenditure except for non-treasury funded agencies that are sparingly undertaking capital projects.
Experts are asking questions as to where all the monies borrowed have been channelled to, considering that while many ministries have not carried out substantial projects, hundreds of local contractors, who claimed the federal government owed them over two trillion naira, have been protesting in the last few days.
But the Budget Office of the Federation, led by Dr. Tanimu Yakubu, had in August stated that the federal government was using 2025 revenue to fund 2024 budget following the extension of the 2024 budget circle by the National Assembly to December 2025.
Speaking at a stakeholders’ engagement with MDAs in Abuja, Yakubu noted that out of the N34 trillion appropriated in the 2024 budget, N19 trillion was allocated for capital expenditure.
He said, “The federal government has used the revenue accruing from the 2025 budget to fund the capital component of the 2024 budget. Similarly, the 2025 revenue projections in the budget have been underperforming as we have not met our oil production quota.”
He, however, said the federal government has concluded plans to commence capital implementation of the 2025 budget soon.
Subsequently, the DG budget also announced that the implementation of the 2025 national budget will commence by the end of September, as the execution of the 2024 budget draws to a close.
He said the N54.99tn 2025 budget is designed to stimulate economic growth, enhance public services, and drive investments in key sectors.
Yakubu emphasised that effective implementation and prudent fiscal management would be critical to achieving the budget’s objectives.
He stated, “The implementation of the 2025 budget will begin by the end of September. The 2025 budget, referred to as the ‘Budget of Restoration,’ aims to address key sectors, boost economic growth, and improve public services. Effective execution and fiscal discipline will be vital to the success of this budget.”
Yakubu further emphasised the importance of citizen involvement, urging that Nigerians are “the ultimate owners of public resources.”
He mentioned initiatives such as translating budget documents into local languages, simplifying budget content, and empowering communities to hold the government accountable.
In the same vein, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, also announced that henceforth, MDAs will not be allowed to award contracts without cash backing.
He said the directive follows the federal government’s implementation of the Cash Management and Bottom-Up Cash Planning Policy, which sets out rules and guidance for planning and managing cash resources to ensure effective and efficient service delivery in executing the 2024 capital budget.
“Henceforth, Warrants/AIEs will be issued to MDAs before any legal commitment is made, serving as evidence of funds available for contract awards or payment for ongoing and completed projects. No letter of award, contract signing, or financial obligation should be undertaken without the corresponding Warrants/AIEs covering the full or committed portion of the contract sum,” Edun said.
He urged MDAs to prudently manage limited resources, optimise revenue collection, and enforce controls to prevent discretionary spending.
He also directed the Accountant General of the Federation (AGF) to develop a new process that will allow MDAs to download and attach Warrants/AIEs as proof of funds during tender board meetings.
According to him, disbursement of funds will remain centralised in the Treasury, with priority given to funding extended 2024 and 2025 capital budgets, particularly priority projects.
‘Our activities grounded’
Speaking to Weekend Trust on condition of anonymity, a source at the Office of the Head of Service of the Federal confirmed that there had been no release of funds by the federal government to MDAs since the first quarter of this year.
He said: “Yes, there has been no release of funds by the FG through the office of Accountant General of the Federation since February/ March, especially for 2025; and the funds released were for the 2024 work plan expenditure. Reasons for that could be due to lack of funds or attendant political will or both. Recurrent expenditure remains epileptic also.”
Speaking on salaries payment, he said: “Salaries are being paid to MDAs but not simultaneously. I mean not the same time but bit- by – bit or in a queue /slower mode of payment amongst offices. For example, some get their salary by the end of the month while some get it in the next one or second week of the new month.
“Recurrent expenditure is being used for the running cost of the offices. For example, office working materials, fuelling of the office vehicles, payment of electricity bills among others.”
On the consequences of the development, he said: “The implication of not releasing funds is that the whole capital projects or programmes may not be executed and that, according to him, poses a threat to the socio economic growth of the entire citizens due to lack of cash inflow in the markets.
“Secondly, it affects the workers’ performance, too, as in the case of their inability to achieve the expected effectiveness and affordable service delivery. The staff can’t meet up if there is no welfare, allowance for supervision or programmes attended which augments/ support their earnings to carter for their households, since salary is nothing to write home about.
“MDAs are aware of the situation. There was even a protest carried out by the labour union some time ago at the door step of the federal ministry of finance, demanding for release of funds,” he said.
Asked if he knew the source of the problem, he said: “The problem is there is no enough money in the federal government account that can take care of all structural and services wise expenditure at a go. Moreover, the funds are generated by sectors like NNPC, Nigeria Custom and Excise, Federal Inland Revenue Service, among others, after which distributions follows.”
He also said that the problem affects all MDAs except the funds raising parastatals that have enough to settle their liabilities and for the welfare of their staff.
We don’t know the real problem –Science ministry source
The Ministry of Science, Technology and Innovation has been without capital releases since the beginning of the year, several sources within the ministry told Weekend Trust.
One of the ministry’s top staff told one of our reporters that he could not explain why no capital funds had been made available to the ministry.
“This ministry is critical to Nigeria’s economy. We have been practically stagnated since the beginning of the year. How many times have you seen us putting adverts in the papers for projects? This to show you that we are being starved of funds,” the staff said.
Another source at the ministry said they initially thought the lack of capital and recurrent funds was due to the investigation of the then minister. “But, we eventually found out that it was a general thing.”
When contacted on how the ministry has been coping, the spokesperson, Mrs Pauline Sule, said she would not speak on the matter. “What do you want me to say?” She queried and asked to be left alone
‘We’re getting necessary funding’
Meanwhile, sources at both the Ministry of Communications and Digital Economy and the National Communications Commission (NCC) said they are getting “necessary funding from the government.”
When contacted, the National Information and Technology Development Agency (NITDA’s) spokesperson, Hajia Hadeeza Umar, said she doesn’t have answer to our reporter’s enquiry, but she would ask the director of finance at the agency.
She later sent a forwarded message purportedly from the director, reading: “It is not true.”
‘We’ve resorted to shift’
In the Ministry of Works, staff members have reportedly resorted to shifts as the lack of implementation of the 2025 budget has led to low activities.
A staff of the ministry, who spoke with Weekend Trust on condition of anonymity as he was not authorised to speak with the press, maintained that activities have been slowed down due to lack of funds’ release to contractors. He said when things were “going on well; staff members were useful in handling files of contractors.”
According to him, “The contractors don’t come again to push for release of funds for their projects. As we all know, the government is no longer releasing funds for projects; unlike before when they crowd our offices.
“The situation has also affected other welfare packages we enjoy. For example, we are yet to be paid the end of the year package for 2024. This also comes from the capital expenditure after the accounts have done their plus and minus for the staff to benefit from any unutilised funds.”
When contacted on how the Ministry of Works is coping with the situation, the ministry’s Director of Press Mohamed A. Ahmed, said our reporter will have to write to the ministry to know the best person that will speak on the matter.
A source at the ministry of aviation also said they are facing financial challenges. “We have not received any capital allocation since January. It is really sad,” he said.
The source added they don’t have problem about their salaries even though there are challenges with overheads from time to time.
In the Ministry of Petroleum Resources, a staff who spoke with our reporter said their activities have not been greatly affected since most of the infrastructure needed in the sector is done by private investors and the Nigerian National Petroleum Company Limited (NNPCL).
“We only make policy direction so it is not affecting us and the minister makes commissioning once in a while. Even the NNPCL is self -funded through profit they make from sale of crude oil they make on behalf of the federation.”
On his part, the acting director, press for the Ministry of Petroleum Resources, said he had no comment to make on the matter.
‘No release since October 2024’
The Federal Ministry of Women Affairs is reportedly facing a severe financial crisis, with no funds released for its operations since October 2024, according to internal sources within the ministry.
A top official, who spoke on condition of anonymity, said the situation has crippled the ministry’s programmes, leaving staff and aides struggling to carry out their duties.
“It’s been tough, no Kobo since October last year,” the source said.
“There are no funds to implement projects. Programmes of the ministry are being sustained only through self-help and partnerships with donor agencies,” the source said.
He revealed that the welfare of workers and political aides has reached “zero level,” prompting a recent protest by ministry workers. “All the programmes budgeted for fall under capital expenditure, and not even a Kobo has been released for one year,” he lamented.
Another source added that staff and aides have been spending their personal money to handle official matters without reimbursement.
“No staff of the ministry has been paid any Duty Tour Allowance (DTA) since October last year, despite embarking on official trips. Even the minister is tired of using her personal funds,” he said.
While civil servants under the ministry still receive their salaries directly from the federal government, the source confirmed that political appointees have not been paid or supported in any way.
The director of press of the National Sports Commission, Mrs Kehinde Ajayi, said the ministry has been operating with the 2024 budget.
“That information is not correct, they have been receiving but it’s just that it’s last year’s capital and recurrent they are receiving,” she said.
At the Federal Ministry of Environment, Alhaji Haruna Ibrahim, the spokesperson, informed Weekend Trust that the ministry no longer manages funds for capital projects. Instead, this responsibility now lies with the Office of the Accountant-General of the Federation.
He said while the ministry handles the paperwork for these projects, actual payments are processed through the Accountant General’s office.
He explained that what is coming to the ministry currently is only the funds for overhead costs.
Similarly, the Chief Information Officer of the Federal Ministry of Agriculture and Food Security, Mr. Ezeaja Ikemefuna, declined to comment on the matter.
However, sources within the ministry revealed that funds have been largely withheld throughout the year, severely hampering many of its operations.
A director in the civil litigations department of the Federal Ministry of Justice, who pleaded anonymity as he was not authorised to speak on the matter, said the situation is not as bad as it is being portrayed due to the management ingenuity of the permanent secretary.
“The way she is managing the ministry is okay, we still get our logistics and allowances to work,” he said.
Another staff of the information department said under anonymity that she is not aware of the situation.
Kamarudeen Ogundele who is the spokesperson of the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), said he was not aware that there was no capital release for the ministry.
Agencies under the Ministry of Marine and Blue Economy are self-funding because they generate revenue through various activities and services. The revenue is paid into the Federal Government Treasury Single Account (TSA).
The self -funding agencies are the Nigerian Maritime Administration and Safety Agency, NIMASA, Nigerian Ports Authority, NPA and the Nigerian Shippers Council, NSC.
However, the Nigerian Inland Waterways Authority (NIWA), Maritime Academy of Nigerian, MAN, and the Council for the Regulation of Freight Forwarding in Nigeria, CRFFN, on their own part, derive their funding from the federal government’s yearly budget and Internally Generated Revenue (IGR).
Sources said because of the advantage they have, the run their activities modestly.
Borrowing spree, less impact
According to the current data released by the Debt Management Office, Nigeria’s total public debt stock rose to N152.40trn as of June 30, 2025, from the N87.38trn Tinubu inherited from his predecessor, the late President Muhammadu Buhari, who oversaw a fuel subsidy regime.
This paper reported that in 21 months spanning from June 2023 to March 2025, the federal government had secured loans worth N13.21trn ($8bn) from the World Bank alone, excluding the $800 million support from the bank to cushion the impact of high fuel prices following the removal of the fuel subsidy. The DMO data shows that the figure over the years stands at $18.04bn.
On June 9, 2023, the global apex bank approved a $750m loan to boost Nigeria’s power sector. The loan with project ID: P174622 was tagged as additional financing for the Power Sector Recovery Performance-Based Operation, which was first approved on June 23, 2020.
In the same month, specifically on June 23, the World Bank approved $500m for the Nigeria for Women Program Scale Up (NFWP-SU) to further support the government of Nigeria to invest in improving the livelihoods of women in Nigeria.
In September 2023, the bank approved an additional $700m for the Adolescent Girls Initiative for Learning and Empowerment (AGILE) project to improve learning outcomes of the girl-child. The funds onboarded 11 additional financing states – Adamawa, Bauchi, Gombe, Jigawa, Kogi, Kwara, Nasarawa, Niger, Sokoto, Yobe, Zamfara – which joined the initial seven pilot states.
In December 2023, the World Bank approved the Nigeria Distributed Access through Renewable Energy Scale-up (DARES) project, being financed with $750m International Development Association (IDA) credit.
In June 2024, the World Bank released a $1.5bn loan to Nigeria to support Nigeria’s Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing Program (DPF). Another $750m was approved for the Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR).
The combined $2.25bn package, according to the World Bank, “provides immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk.”
On September 26, 2024, the multilateral organisation also approved three operations for a total of $1.57bn to support the Nigerian government in strengthening human capital through better health for women, children and adolescents and building resilience to the effects of climate change, such as floods and droughts, through improving dam safety and irrigation.
Furthermore, in October 2024, the World Bank approved a $500m loan to support the Sustainable Power and Irrigation for Nigeria (SPIN) project aimed at reducing climate-induced challenges.
The year ended with another approval of $500m in concessional financing for the Rural Access Agricultural Marketing Project-Scale Up (RAAMP-SU) in Nigeria, according to the Washington DC-based institution.
The federal government had earlier this year announced that it was expecting fresh loans from the World Bank, totalling $2.2bn.
In March 2025, the World Bank approved a $500m loan for Nigeria to support its Community Action for Resilience and Economic Stimulus (CARES) Program aimed at providing critical relief to vulnerable households and small businesses grappling with inflation and its attendant economic hardship. The same month, Nigeria obtained another $500m and $80m loans from the bank to enhance education quality and improve nutrition for underserved groups, respectively, bringing Nigeria’s total external debt to the bank to $17.32bn (about N26.5trn).
Commenting on the CARES loan, Dr Chinyere Almona, the Director General, Lagos Chamber of Commerce and Industry (LCCI), said in a statement that Nigeria’s rising debt burden is a growing concern, particularly given the slow pace of disbursement and implementation of previously approved loans.
He urged the government to adopt a transparent and efficient disbursement mechanism to ensure the funds reach the intended beneficiaries, adding that a robust monitoring and evaluation framework should be established to track the impact of these funds and prevent misallocation.
“From a business perspective, while targeted stimulus programmes can offer temporary relief, structural economic challenges such as inadequate infrastructure and multiple taxation remain unaddressed. Businesses require a stable operating environment, and while social welfare programmes are essential, they must be complemented by policies that foster productivity, investment, and job creation.
“There is also concern about the efficiency of fund allocation and utilisation, given that only 16% of previously approved World Bank loans under the current administration have been disbursed. This raises questions about the absorptive capacity of relevant institutions and the risk of funds being underutilised or mismanaged. The LCCI stands on the point that a more impactful stimulus for economic growth is that the government solves the perennial problem of poor power supply and high cost of energy and creates an enabling business environment where small businesses can thrive, creating jobs and generating revenues for the government,” Dr Almona stated.
In July, President Tinubu secured the Senate’s approval for a fresh external borrowing plan for the 2025–2026 fiscal cycle. The borrowing package includes $21.19bn in direct foreign loans, €4bn, ¥15bn, a $65m grant and domestic borrowing through government bonds and a provision to raise $2bn through a foreign-currency-denominated instrument in the domestic market.
The president’s letter seeking the approval for a fresh N1.15 trn domestic loan to finance the 2025 budget deficit was read on the floor of the Senate on Tuesday, six days after the National Assembly approved Tinubu’s request to secure a $2.3bn external loan for the same purpose.
Worried by the government’s borrowing spree, Kayode Omosebi, the Chief Executive Officer of Seeder & Ash Capital, a proprietary investment and financial advisory firm, posed: “Is Nigeria Quietly Selling Off Its Future Budget?”
Omosebi, in a July 31 post on his X page, maintained that the federal government was quietly borrowing billions and tying repayment to future budgets in what he described as “budget securitisation.”
“This is not your usual debt. It’s much worse. It means Nigeria borrows money today and agrees to repay directly from future oil exports or FG allocations,” he wrote, identifying three of such loans as $3.3bn crude oil loan, N1trn Lagos-Calabar highway loan and N757bn Pension Arrears Bond.
“That’s N7.1trn (combined) — more than Nigeria’s entire 2025 capital budget”.
“…This isn’t alarmism. These are numbers. You can’t borrow N7trn off the books, tie it to crude oil and pensions, then pretend all is fine, especially when you’re already spending N11.2trn on debt servicing out of a N28.7tn (2025) budget. That’s 39%,” he added.
In a further breakdown, Omosebi stated that the Afreximbank $3.3bn loan requires a repayment plan of 90,000 per barrel of crude oil per day for about six years and that based on 2025 oil prices, repayment would consume N1.2trn per year.
“This money never enters FAAC. States lose out. Citizens feel nothing. Yet we owe,” he lamented.
On the Lagos-Calabar Coastal Highway N1trn Phase I loan backed by annual federal government allocations for over 10 years, the financial expert worried that there was no tolling plan or revenue model to repay the debt.
“That’s over N100bn vanishing from future budgets every year. N757bn Pension Arrears Bond: the government owed pensioners. Instead of paying, they borrowed from PFAs, creating a 20-year debt. Now, retirees and workers are funding their own unpaid benefits. The repayment? N75bn–N90bn/year,” Omoseni added.
How are Nigerians faring?
Meanwhile, there are widespread concerns that the revenue increase and multi-billion-dollar borrowings have had little impact on the lives of average Nigerians who contend daily with high unemployment, a cost-of-living crisis and worsening poverty.
A 2024 World Bank report revealed that 129 million Nigerians, or 56%, live below the poverty line, up from 83 million, or 40%, in 2018. A 2025 survey by Afrobarometer, a pan-African research network that conducts public attitude surveys on democracy, governance, economy and society, found that the majority of Nigerians believed the economy was worse off after the subsidy removal and called for its reinstatement.
According to the study, more than nine out of 10 Nigerians (93%) say the country is going in “the wrong direction,” while 6% think otherwise. Nearly nine in 10 citizens (88%) said the country’s economic condition was “fairly bad” or “very bad,” and 74% complained of poor personal living conditions.
“More than nine in 10 Nigerians (95%) say they or someone in their household went without a cash income at least once during the previous year. Most also report shortages of food (82%), medical care (82%), water (74%), and cooking fuel (79%). The share of Nigerians experiencing moderate or high levels of lived poverty has increased by 41 percentage points since 2017.
“The increasing cost of living is the most frequently cited problem that Nigerians want the government to address. The economic issues of poverty, unemployment, and management of the economy also make the top five, along with crime/security. Ratings of the government’s economic performance are overwhelmingly negative.
“Fewer than one in 10 Nigerians rate the government positively on improving living standards of the poor (8%), managing the economy (7%), creating jobs (6%), narrowing gaps between rich and poor (5%), and keeping prices stable (3%). Almost six in 10 (58%) say the government should reinstate the fuel subsidy even if this means reducing other important expenditures such as health or education. More than one-third (35%) disagree,” the report stated.
Speaking to Channels TV in August, ace Nigerian author Chimamanda Ngozi Adichie worried that things had gone south in the country to the extent that the middle class, who should be able to live a fairly comfortable life, had become beggars.
“Life has become so hard in Nigeria, and I can see it. For example, people who were formerly kind of securely middle class—not that life was rosy for them, but they got by—are now people who beg and are in need. That worries me greatly.
“People talk about the stock market. Personally, I don’t really care about those sorts of things. What I care about is that person earning minimum wage. How is that person getting on in this economy? It’s the suffering that worries me the most. And it’s terrible,” she remarked.
Government reforms working –FG
Repeated attempts by our correspondent to get the comments of the Ministry of Finance and the Ministry of Budget and Economic Planning on the fiscal management proved abortive.
However, the federal government and the presidency have consistently defended the current administration’s reforms and highlighted its achievements.
In a policy explainer titled “Two Years Later: Key Benefits of Subsidy Removal,” the National Orientation Agency (NOA) said the termination of the petrol subsidy by President Tinubu had ended years of financial drains that cost Nigeria over $84bn between 2005 and 2022 and the savings had financed 40 critical road projects across the country.
The document also noted that the subsidy savings helped clear a $7bn foreign exchange backlog owed to foreign airlines and businesses, increase Nigeria’s external reserves, pay off N7trn in Ways and Means debt, settle Nigeria’s $3.26bn IMF loan and reduce the debt service-to-revenue ratio from 97 per cent in 2023 to 68 per cent in 2024.
The Special Adviser to the President on Media and Public Communication, Sunday Dare, in October corroborated the NOA’s report, saying Nigeria’s economy had been rescued from the “breaking point” and primed for progress.
“Before May 2023, Nigeria was consistently running a trade deficit, importing far more than it exported, with a negative balance of payment that drained the economy. Today, the tide has shifted: through reforms, Nigeria now records a trade surplus, easing pressure on external accounts.
“In the past, Nigeria operated multiple exchange rate windows, creating distortions and a wide gap between official and parallel markets. With reforms, the exchange rate has been unified, narrowing the gap and reducing uncertainty,” Dare wrote in a post on X.
By early 2023, he said unmet forex demand stood at $7bn while net reserves had fallen below $4bn, leaving Nigeria dangerously exposed.
“Reforms have since cleared FX forwards, rebuilt reserves to over $23billion, and restored confidence by allowing FX access even on naira cards.
“Nigeria’s tax-to-GDP ratio was stuck below 10 per cent, while 97 per cent of government revenue was consumed by debt servicing — a near-bankruptcy situation. Today, reforms have lifted the tax-to-GDP ratio above 15 per cent, while debt service has fallen below 50 per cent of revenue,” he added.
He further explained that the fuel subsidy withdrawal had freed up funds for critical investments, while fuel supply is now guaranteed and states receive positive FAAC allocations.
“Previously, Nigeria’s budget was dominated by high deficits and low capital expenditure. Reforms have reversed this trend: the deficit is now declining, while infrastructure spending is expanding,” he stated.
The presidential aide said Nigeria’s fiscal management was weak, uncoordinated and riddled with inefficiencies, but with Tinubu at the helm, “economic reforms have strengthened coordination, improved transparency, and made public financial management more disciplined.”
He noted that without the reforms, Nigeria would have faced worsening deficits, collapsing reserves, hyperinflation, ballooning debt, and possible economic collapse.
Economists weigh in
Professor Ndubisi Nwokoma, an emeritus professor of financial economics and former Director of the Centre for Economic Policy and Research, University of Lagos, in a chat with Weekend Trust, explained that the revenue growth had only availed the government of more money to play around with. He said it is unthinkable that the government would be borrowing heavily despite the resources it is able to save from the stoppage of subsidy payment on premium motor spirit (PMS).
“I think it’s a governance issue. This is purely poor economic governance, because the story before now was that when we removed the subsidy, the government would have some kind of freedom to run the economy more appropriately, without having to borrow because of the gaps in financing the economy. But it appears that is not really happening. When you are no longer paying a subsidy, in conjunction with the liberalisation of the foreign exchange market, there’s more money, but there’s a lot of inefficiency in public expenditure at both federal and state levels.
“There’s inefficiency, there’s a very high cost of governance. The federal government has more money to play around with, but the trickle-down effect on the economy is very low. And they’re even borrowing more to ameliorate the effect of the fuel subsidy removal. So it is purely a governance issue. The ordinary man has been seriously short-changed,” he said.
The economist urged the government to channel resources into rejigging the economy in a way that will have trickle-down effects on the ordinary man.
“The roads are in a very poor condition. We are embarking on the Lagos-Calabar Coastal Road, for which we’re not sure how many years it will take to complete and a lot of money is involved. The road between Benin and Auchi is in a terrible condition; these are federal roads all over the country.
“We are embarking on what we don’t really need: the Lagos-Calabar coastal and Badagry-Sokoto highways, while the existing roads are in a very poor state. Where is the infrastructure that we are borrowing all this money for? They should just change their ways. There should be accountability and transparency; there should be benchmarks on what the monies are meant for,” Prof. Nwokoma stated.
Professor Adeola Adenikinju, President of the Nigerian Economic Society (NES), also expressed concern over the high poverty level amid improved government revenues, demanding transparency and effective utilisation of funds.
“When you remove the subsidy, you are supposed to take care of the poor and vulnerable, but are we doing that now? Poverty has increased, and unemployment is also on the high side. In what way have we been able to mitigate the effects of the subsidy removal? I think that is the question that we should be asking,” he said.
Prof. Adenikinju urged the government to be wary of debt exposure, noting that the persistent borrowing calls for concern over its “inter-generational implications” and efficiency of the spending.
“At the federal level, there is so much baggage, so much avoidable spending, and unnecessary spending on travel. So all those things are there; the government needs to be very much concerned. Debts are not free,” he added.
The renowned economist lamented that the National Assembly had failed to double down on its oversight function, calling on civil society organisations and the public to hold the government to account.
On his part, economist and Director Centre for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf, advised the government to review its expenditure and align spending with its capacity to fund projects.
“We need to boost revenue and review our expenditure. Anything that is not too critical, we can step them down and align our spending with our capacity to fund projects. We need to ensure that our non-tax revenues, like revenue coming from other revenue-generating agencies of government, are improved. We must ensure that we do better in our oil production,” he added.
Yusuf also warned the government to reduce foreign debts and stop pursuing expensive debt stocks, saying external loans are more difficult to service than domestic borrowing.
“Then for projects that the private sector can fund, we should also be looking in the direction of public-private partnership,” he added.
