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Can Tinubu’s reform deliver shared economic prosperity? 10 Nov 2025

In early September, President Bola Ahmed Tinubu disclosed that the government had surpassed its revenue projection for the entire fiscal year 2025 at the end of August. Although it might have been received with cynical incredulity, the fact of the claim has been established. The total revenue collected by the government reached N20.59 trillion as of the end of August, compared to the revenue target of N18.32 trillion for the year as stated in the 2025 Appropriation Bill. 

When Tinubu was Governor of Lagos State between 1999 and 2007, his administration increased the annual internally generated revenue from N15 billion to N83 billion. However, a more than five-fold increase in the IGR did not translate into a dramatic improvement in public infrastructure and service delivery by the state government. Rather, it was the macroeconomic reform by the federal government that accelerated the country’s GDP growth. Specific federal programmes, including the banking sector recapitalisation and licensing of mobile telecommunication services, impacted the economy and Lagos residents far more than the state government did.

So, while the rise in the revenue profile of the federal government under the President Tinubu administration is to be expected, it should also be worrisome that his record of using public revenue to catalyse shared economic gains is less known. Meanwhile, his economic reforms, headlined by the introduction of a flexible exchange rate and the removal of petrol subsidies, have impoverished Nigerians and raised the cost of doing business, while increasing public revenues. 

It is troubling that raising public revenue appears to be the administration’s forte. From January 2026, the government will start to garner a further increase in revenue when it begins to implement the new tax laws. As the government’s revenue grows again, the disposable income of Nigerians, including low-income earners, will start to plummet.

For the administration, the improved revenue data is a major validation of its economic reform. By doubling down on revenue growth strategies, the administration is likely to claim more success, even as the burden of taxation weighs heavily on the people and businesses next year, after the debilitating impact of inflationary policies.

The American inventor and entrepreneur Henry Ford said a strong economy depends on ordinary people having enough income to buy consumer goods, services, and homes. However, the strength of the Nigerian economy is currently defined by government revenue growth, while real wages continue to fall, and businesses continue to struggle. 
    
Faced with public curiosity, the government has tried to explain the utilisation of the rising revenue. Increased revenues have raised the nominal value of the fund shared monthly by the Federal Account Allocation Committee (FAAC) to the three tiers of government. This suggests economic improvements should be simultaneous across federal, state, and local government levels, leading to shared economic prosperity. But this is hardly the case. 

The federal government leads in wasteful spending without accountability. Some of the high-profile infrastructure projects it has embarked on include the Lagos-Calabar Coastal Road, the rehabilitation of Murtala Muhammed International Airport, and the expansion of Lagos ports. These and other projects were awarded without public knowledge of a competitive bidding process before the contract awards, raising doubts about their cost-effectiveness. Questions have also been asked about the relative economic value of the coastal road and the perennial remodelling of the Lagos airport. And while these projects have contributed to rising public debt, they have yet to impact the loose labour market, as many young Nigerians remain unemployed or underemployed.

The social safety net programmes have also not delivered on substantial poverty alleviation. The problems caused by the economic reforms appear to have overwhelmed the programmes to alleviate them. This is not surprising. It was predictable that the energy price and exchange rate reforms would cause too serious shocks to manage.

The fundamental issue now is how increased government revenue can deliver shared economic progress, evidenced by a marked improvement in the welfare of the people. Most commentators believe this is the challenge the government faces now.

Three areas of change are inevitable in meeting this challenge. First, wages must increase. But only last year, the national minimum wage was increased by approximately 133 per cent. This will seemingly rule out consideration for another increase within the space of two years. In the meantime, the private sector should take the lead by raising salary levels, even if it means restructuring executive compensation and reducing dividend payouts. 

Second, inflation must be curtailed. It appears this is already the case, given the downward trend in the headline inflation rate since July this year. The challenge is that the slower pace of price increases was achieved by modulating the methodology for calculating the consumer price index. Nigeria’s cost-push inflation is also not helped by the Central Bank of Nigeria maintaining a high interest rate, which will continue to be passed to consumers in the form of high prices. 

Third, there must be productivity growth. This is the best way to backstop inflation, which a widespread wage increase and higher demand may trigger. Civil service reform that addresses corruption and boosts professionalism is critical for the public sector. In the private sector, innovation is required to improve the quality of local manufactures to compete favourably with imported products. The scope for this is massive across the agriculture and industrial sectors. 

These policy measures are much more important than the expensive infrastructure projects, which are being delivered with debt and foreign technology.

Improvement in the economy is best validated by advances in the welfare of the people, not an increase in government revenue. The Tinubu administration needs to truly focus on improving the welfare of the Nigerian populace, rather than being fixated on public revenue growth.

Jide Akintunde is Managing Editor of Financial Nigeria magazine, and Director, Nigeria Development and Finance Forum.