When President Bola Tinubu mounted the saddle on May 29, 2023, he launched sweeping reforms touted as necessary reset initiatives that will usher in economic renewal.

Two years on, families have tightened their belts, many businesses are on ventilators and anxiety thickens as Nigerians await the dividends of the economic reset loosely dubbed ?Tinubunomics?.

The disruptive reforms, sold as the bitter pill to cure ailing systems, have brought inflation, fuel hikes and generally soaring costs.

Yet, amid the hardship, Nigerians console themselves with the fragile hope that the turbulence will someday give way to stability and that the sacrifices of today will not be in vain.

President Tinubu has said repeatedly that his administration inherited a fragile economy marked by fiscal imbalances, mounting debt and distorted market policies.

As a repair strategy, he began with the removal of the fuel subsidy, then came the unification of exchange rates.

While Nigerians nurse what is believed to be short-term pains, Tinubu?s economic policies have won praises from global institutions.

For many, President Tinubu?s two-year scorecard presents variegated inferences.

On one side are gains in financial liberalisation, digital innovation and investor confidence, while on the flip side, the country battles persistent inflation, naira volatility and weakened purchasing power.

Dissecting the economic reforms

At the heart of Tinubu?s economic strategy is a promise to ?unlock the economy.? Within weeks of taking office in May 2023, the administration removed the long-standing petrol subsidy and directed the Central Bank of Nigeria (CBN) to unify the multiple exchange rates. These moves won plaudits from global investors and multilateral institutions, including the International Monetary Fund (IMF) and World Bank, which viewed them as steps toward restoring macroeconomic stability.

However, the immediate consequences were stark. Fuel prices more than tripled, leading to a chain reaction of cost-push inflation across transportation, manufacturing, and food prices. Although, inflation which stood at 34.80 per cent in December 2024, has now eased to 23.71 per cent in March, according to the National Bureau of Statistics (NBS). Food inflation which had risen to 40 per cent, now moderated to 21.26 per cent.

Senior Economist, Nigerian Economic Summit Group (NESG), Dr. Tunde Omoyeni, noted that the reforms were inevitable, but the speed and scale created a shock,? says Dr. Tunde Omoyeni, a senior economist at the Nigerian Economic Summit Group. ?They were not matched with adequate social cushioning mechanisms, which is why many Nigerians are feeling the pain.?

Banking sector resilience amid turbulence

The banking sector has been at the center of Nigeria?s economic transition. The FX reforms, particularly the floating of the naira, triggered a period of extreme volatility. The naira, which traded around N460/$1 in May 2023, briefly touched N1,900/$1 in early 2024 before stabilizing around N1,585/$1 by mid-2025.

The depreciation initially led to sharp foreign exchange losses for banks with high dollar exposures, before the apex bank prompted a round of asset revaluations and recapitalization.

The foreign exchange unification exposed a mismatch in currency positions for many banks,? notes Abdulrasheed Bamidele, an analyst at Meristem Securities. ?Some of them suffered losses, but the more digitally agile banks used it as an opportunity to expand FX services and trading desks.?

To bolster the sector, CBN Governor, Olayemi Cardoso, introduced a raft of reforms including the capital adequacy regime, directing banks to raise their minimum capital base by 2026. Tier-1 lenders like Zenith, GTCO and Access Bank who already began the rights issues and foreign capital sourcing, are halfway into it, highlighting the sector?s resilience and investor confidence.

Despite initial shocks, the banking sector has continued to post solid profits, thanks to high-interest-rate environments. The Monetary Policy Rate (MPR) has been raised multiple times, now standing at 27.50 per cent. While this helped moderate speculative FX demand and attract foreign inflows, it has also increased the cost of borrowing, particularly for SMEs.

FX liquidity and return of foreign investors

Tinubu?s reforms were designed to restore investor confidence, and there are signs this is working. After two years of foreign capital flight, Nigeria saw modest inflows resume in late 2024, especially into the fixed-income market. Eurobond yields have moderated, and Nigeria successfully returned to the international debt market in Q1 2025, raising $1.5 billion in oversubscribed issuance.

The apex bank?s bottom line even improved from a deficit position of N1.3 trillion in 2023 to a surplus of N165 billion in 2024, largely fueled by a substantial FX revaluation gain of N11.28 trillion, representing a 225 per cent year-on-year increase, alongside a 29.16 per cent growth in interest income, which climbed to N5.1 trillion from N3.95 trillion in 2023.

The CBN also cleared a backlog of $7 billion in unmet FX forwards, sending a signal of policy credibility. However, challenges remain. The naira?s volatility still deters long-term investments, and FX reserves, while stabilising, remain under pressure due to weaker oil revenues and rising import bills.

According to Head, Strategy at FSDH Merchant Bank, Ayodele Akinwunmi, said, ?The foreign exchange market is becoming more transparent, but supply-side reforms are needed to truly stabilize the naira. We need to boost exports, cut reliance on imports, and make Nigeria an investable proposition beyond portfolio flows.?

GDP growth, productivity gaps

GDP growth under Tinubu has hovered between 2.5 per cent and 3.1 per cent annually, below population growth of 2.6 per cent. While sectors like telecoms, fintech, and agriculture have shown resilience, others, particularly manufacturing, have struggled due to high input costs, energy shortages, and forex constraints.

The administration has launched several initiatives to stimulate productivity, including the Presidential Compressed Natural Gas (CNG) project and renewed support for the Anchor Borrowers? Programme. However, execution has been slow, and structural bottlenecks remain.

A policy fellow at the Center for the Study of Economies of Africa (CSEA), Ngozi Udeh, said, ?The economy is growing, but not inclusively. Urban middle classes are under pressure, and poverty levels have likely worsened despite reformist optics.?

Social impact and public sentiment

For many Nigerians, the reforms feel like bitter medicine. Real incomes have eroded sharply, with the minimum wage unchanged at N30,000 per month until early 2025. After prolonged negotiations, the government approved a new national minimum wage of N75,000, with implementation hurdles reportedly cleared at the state level with the likes of Edo State recently approving the new minimum wage.

However, unemployment and underemployment remain high, especially among the youths. Though digital sectors like Fintech and content creation offer new opportunities, the formal job market has not expanded fast enough to absorb the labor surplus.

Protests over the cost of living have erupted intermittently in major cities, and labour unions have staged strikes, calling for more equitable sharing of reform burdens.

Digital innovation

If there is a silver lining, it is in Nigeria?s rapidly evolving digital and payments ecosystem. The CBN, on Tinubu?s watch, has deepened support for eNaira adoption and payment digitization, and fintech players have stepped in to fill gaps left by traditional banks.

However, there are reports that the apex bank is making moves to revive the digital currency. Launched in October 2021, the currency showed strong uptake. For example, the eNaira app was downloaded nearly 840,000 times and over 270,000 wallets, comprising 252,000 consumer and 17,000 merchant wallets were actively in use. Transaction volume and value surged to over 200,000 and N4 billion, respectively. However, that momentum has not been sustained.

In another development, the number of banked adults has increased, aided by mobile banking and agency networks. Peer-to-peer (P2P) crypto trading has also grown, particularly among the youth, though regulatory oversight remains a challenge.

?Nigeria is becoming Africa?s digital finance capital,? says Tosin Eniolorunda, CEO of fintech firm Moniepoint. ?Despite the economic challenges, the appetite for innovation, especially among young Nigerians, is undimmed.?

In his views, Nigerian businessman and Chairman, First Holdco Plc, Femi Otedola, commended the visionary leadership of President Tinubu.

?He deserves credit for championing the tough but necessary reforms in our economy. I also commend the CBN Governor, Olayemi Cardoso for his courageous and pragmatic policy reforms. His actions are restoring credibility to the financial system and giving investors like me the confidence to commit long term capital to this country?, Otedola said.

Analysts? forecasts, risks

As Tinubu enters the second half of his term, analysts say policy credibility and implementation will be crucial. Macroeconomic researcher at the University of Lagos, Dr. Adedayo Adeyemi, said, ?We have seen courageous decisions, but now it should be about coordination. You cannot float the naira without boosting exports. You cannot remove subsidies without fixing transport. These are policy sequencing issues.?

Peeping into the future, key risks will include debt sustainability, inflation management, global shocks, power and infrastructure. With public debt now over N97 trillion and debt servicing consuming over 60 per cent of revenues, fiscal reforms are essential.

Similarly, monetary tightening is unlikely to ease until inflation drops significantly. Analysts forecast inflation to average 26?28 per cent in 2025 before decelerating in 2026, provided no fresh shocks emerge.

It should also not be forgotten that Nigeria remains vulnerable to oil price fluctuations and global financial tightening. A slowdown in China or geopolitical shocks could hurt exports and remittances.

It is also important to state that without fixing the country?s energy?s crisis, productivity will remain weak. Although, Tinubu?s administration has signed power MOU?s and privatized parts of the transmission grid but execution remains key.

Despite these hurdles, there is cautious optimism. The IMF projects GDP growth of 3.5 per cent for Nigeria in 2026, assuming reforms continue and oil output recovers. Some economic analysts are betting on a ?soft landing? scenario, where the initial pain gives way to a more balanced and inclusive recovery.

Summarily, President Tinubu?s first two years in office have reshaped Nigeria?s economic landscape. His administration?s reforms have been ambitious, disruptive, and, at times, politically risky. The pains have been real, but so too are the long-term gains beginning to emerge.

For the banking sector, this period has been one of adaptation, resilience, and cautious expansion. For the broader economy, it is a tale of transition: one where policy boldness must now be matched with inclusive governance, institutional strengthening, and sustained investment in human capital.

According to experts, while Nigeria crosses the two-year milestone, the road ahead remains challenging but not without promise. (Daily Sun)

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