By Abidemi Adebamiwa
Economic planning in Nigeria has always been a tricky balancing act. Leaders come with big promises and bold plans, and President Tinubu’s 2025 budget proposal is no different. The plan focuses on increasing government revenue, borrowing less, and making changes that could set the country on a growth path. But under the promising numbers, there are serious challenges that ordinary Nigerians face every day. Businesses are struggling, families are feeling the pinch, and multinational companies are pulling out of Nigeria. The big question is this: Can this budget truly make life better for Nigerians, or will it make things worse?
The proposed budget is worth N47.9 trillion. Compared to previous administrations, it reflects a shift toward relying less on borrowed money and more on what Nigeria can generate internally. This idea of “self-sustainability” is important because borrowing comes with heavy interest payments that slow down the economy. Economists Carmen Reinhart and Kenneth Rogoff explain in This Time is Different how too much debt keeps countries stuck in cycles of failure. Nigeria’s debt repayments have been draining resources for years, making this new focus on local revenue a step in the right direction.
However, even good plans come with challenges. For example, the removal of fuel subsidies was supposed to save money for development projects like roads and schools. Instead, it has made life harder for Nigerians. Olivier Blanchard, a well-known economist, explains that inflation—rising prices of goods and services—hits the poorest people the hardest. In Nigeria, transportation and fuel costs have gone up, making it expensive for families to survive.
According to the National Bureau of Statistics, inflation soared for the third straight month in November 2024, reaching a near 30-year high of 34.6%, up from 33.9% in the prior month. Food inflation surged to 39.93% in November, a sharp increase from 32.84% a year earlier. Higher prices of staple foods like yams, water yams, cocoyams, guinea corn, maize, rice, beer, and vegetable oil have made it incredibly difficult for families to meet basic needs. This spike in prices has left many households struggling to survive, forcing difficult choices between food, energy, and other essentials.
Businesses, especially small ones, are not spared. Many struggle to pay higher costs for fuel and supplies, leading them to shut down or reduce staff. Middle-class families—already squeezed—find their salaries can’t buy as much as before. Without the right support, these reforms could push more Nigerians into poverty rather than helping them rise out of it.
Another major issue is Nigeria’s foreign exchange market—how the government handles the value of its currency. Making adjustments to currency policies should help stabilize the economy, but poor implementation has caused problems. Prices keep changing, which creates uncertainty for investors. This has scared of many big companies. In the past three years alone, more than 16 multinational corporations have left Nigeria. Companies say high costs, inconsistent government policies, and an unfriendly business environment have made it too hard to operate.
This is a major problem. When companies leave, jobs disappear. Foreign investment drops and the economy shrinks. The Nigerian Investment Promotion Commission reported that in Q1 2024, foreign direct investment (FDI) fell to $468 million. Just three years ago, it was $1.5 billion. A 2024 World Bank report added that neighboring countries like Ghana and Kenya are doing a better job of attracting investors. Without fixing these issues, Nigeria risks being left behind in the global economy. The government needs consistent policies that build trust and attract investors to bring money and jobs into the country.
At the same time, Nigeria’s education system remains a big problem. Over 20 million children in Nigeria are out of school—one of the highest numbers in the world. President Tinubu has promised to address this crisis and return these children to the classroom. But fixing this issue requires solving deeper problems, like underfunded schools, poor infrastructure, and a neglected system that fails to provide quality education. In northern Nigeria, many children are part of the Almajiri system, which, as described by scholars like Mohammed Sani and Kabiru Ibrahim in their research on educational inequality, reflects a failure to provide structured, formal education. This leaves them stuck in poverty with no chance of gaining the skills they need for a better life.
Regular strikes by teachers and unpaid salaries make things even worse. University staff, through the Academic Staff Union of Universities (ASUU), have gone on strike repeatedly in recent years, keeping students out of school for months. This disrupts learning, delays graduations, and weakens the workforce. Many frustrated Nigerians choose to study abroad, draining talent out of the country. Ironically, while public schools in Nigeria suffer, government officials send their children to expensive schools overseas. Cases like Yahaya Bello’s alleged misuse of public funds for personal gain show how corruption deepens inequalities and robs Nigeria’s youth of opportunities.
Transparency is another critical issue. The Nigerian National Petroleum Corporation Limited (NNPCL) provided a $1 billion loan to support the Dangote Refinery—a significant and well-intentioned gesture aimed at boosting local production and reducing Nigeria’s reliance on imported fuel. However, many Nigerians were left in the dark, believing the funding had been independently secured by Aliko Dangote.
While the effort was noble and reflects a strategic investment in the country’s economy, the lack of transparency raises serious concerns. Citizens have the right to know how national resources are being utilized, particularly when such funds play a critical role in shaping Nigeria’s future. Without open communication, trust in leadership erodes, and skepticism grows, even when policies are well-meaning.
A further concern is that while the refinery has started exporting fuel to other countries, Nigerians are still grappling with high fuel prices at the pump. This raises an important question: if Nigerian money played a significant role in funding the construction of the refinery, shouldn’t Nigerian citizens be the first to benefit? Countries like China provide a clear example of prioritizing self-sufficiency before expanding into international markets. China ensured local energy and industrial production stability before exporting to other countries. Similarly, India focused on domestic energy security first, stabilizing fuel prices and ensuring that citizens reaped the rewards before expanding exports.
Nigeria must take a similar approach by leveraging the Dangote Refinery to meet domestic fuel demands and stabilize prices before exporting to foreign markets. This would ensure that Nigerians, who have indirectly contributed to the project, benefit from their sacrifice. Prioritizing the well-being of citizens should be the foundation of such significant investments.
Nigeria’s economic reforms are showing early signs of progress. According to the Federal Ministry of Information and National Orientation, GDP growth rose to 3.46% year-on-year in Q4 2023, a significant improvement over the 2.54% recorded in Q3. Capital importation surged by 66% in the same quarter, reversing a 36% decline from Q3, signaling renewed investor interest. Additionally, petrol importation dropped by 50% since the removal of subsidies, reducing Nigeria’s dependency on foreign fuel.
Oil production has also climbed, rising from 1.22 million barrels per day (mbp/d) in Q2 2023 to 1.55 mbp/d in Q4 2023. Furthermore, in January 2024, the Nigerian Stock Exchange All-Share Index crossed the 100,000 mark for the first time, reflecting improved investor confidence. While these figures are promising, the benefits must trickle down to ordinary Nigerians, ensuring that growth is inclusive and sustainable.
This lack of transparency highlights a troubling pattern. Government officials, instead of prioritizing national interests, often focus on personal gain. Public resources that should fund schools, healthcare, and infrastructure are misused. If leaders keep ignoring the needs of the people, Nigeria risks losing an entire generation of bright minds and skilled professionals. Trust and accountability are the keys to making reforms work.
Rebuilding trust will not happen overnight, but it is possible. Kemi Badenoch’s blunt comments about Nigeria’s international reputation remind us that the world is watching. These remarks, while harsh, highlight a truth that cannot be ignored: corruption, lack of transparency, and poor governance continue to damage Nigeria’s image and economic potential. For Nigeria to move forward, its leaders must take bold and deliberate steps to confront these issues, showing progress that both Nigerians and the international community can believe in.
Countries like Rwanda and Singapore serve as proof that honest governance can drive real economic success. Rwanda transformed its economy by prioritizing anti-corruption initiatives and investing heavily in infrastructure, which has helped attract businesses and improve living standards. Similarly, Singapore’s clear policies, strong leadership, and unwavering commitment to transparency turned it into one of the world’s most trusted business hubs. Nigeria has the potential to follow in their footsteps, but this requires a renewed focus on accountability, equitable policies, and a commitment to restoring public trust.
Immediate action is needed to help Nigerians cope with the effects of these reforms. The government must prioritize programs that help vulnerable families, such as cash transfers to offset rising costs. More importantly, money from taxes must be used to improve public services, like hospitals, schools, and roads, so Nigerians can see the results of these changes.
Nigeria’s rural areas, often ignored, have the potential to drive growth. Investing in better roads, technology, and agriculture can transform these communities into productive economic hubs. If done right, these investments will lift people out of poverty and make the economy stronger for everyone.
The stakes for Nigeria have never been higher. This budget could be a turning point—one that sets Nigeria on a path to recovery, stability, and growth. But if the government fails to deliver on its promises, the consequences will be severe. Nigeria’s leaders must take responsibility, rebuild trust, and focus on creating a fairer economy that works for all its people. This is a moment Nigeria can not afford to waste.
–Abidemi Adebamiwa writes from Pleasanton in California