Responding to the widespread demands for a cabinet reshuffle, President Bola Ahmed Tinubu made changes on October 23, replacing five cabinet members with seven new ones. Additionally, the president merged certain ministries, such as Sports and Culture, and streamlined leadership in regional development bodies like the Niger Delta Development Commission (NDDC). He also introduced five new regional development agencies, ensuring representation across all geographic zones of the country, bringing the total to six.
For better coordination, President Tinubu consolidated these regional agencies under a single ministry, transforming the former Niger Delta Ministry into a supervisory body for all six agencies.
Many Nigerians recognize that the most pressing obstacle to economic growth is the country’s inability to generate enough revenue to cover its increasing expenses. This challenge is worsened by the costs associated with running a large presidential system of government and declining revenues, particularly from oil—Nigeria’s main income source. Crude oil production has been hampered by delays in implementing the Petroleum Industry Act (PIA), which took nearly 20 years to become law under former President Muhammadu Buhari in 2021.
Compounding the problem, significant amounts of oil have been stolen by organized groups, as noted by Tony Elumelu, chairman of Heirs Oil. Elumelu reported that a substantial portion of the oil produced by his company and transported through the Forcados pipeline was siphoned off by these syndicates. To address this, a task force was established to combat oil theft.
These efforts are beginning to show positive results, with production rising to between 1.5-1.6 million barrels per day. To further boost income generation, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) led by Engineer Gbenga Kolawole, has set a goal to increase production by one million barrels within 12-24 months. Achieving this would push Nigeria’s daily production to 2.6 million barrels by 2025—a level not seen in about 20 years.
This context is crucial for understanding that the current administration has pinpointed the main issue affecting Nigeria’s economy: low revenue generation and productivity, despite untapped potential within the workforce. To address these challenges, the government is working to boost oil production, curb theft, and remove barriers to private sector involvement in previously restricted sectors, making it easier for investors to participate.
Moreover, the government is taking targeted actions to assist the poor, such as reducing income inequality through progressive taxation. This approach includes differentiated electricity tariffs, where wealthier citizens pay higher rates (Band A), while lower-income groups benefit from reduced rates in Bands B, C, D, and E.
By implementing this tiered electricity pricing, the wealthy effectively subsidize energy costs for poorer households. Additionally, starting in January, the government plans to adjust taxes so that wealthier individuals bear a greater share of the burden, alleviating pressure on poorer citizens who have suffered from past economic policies.
Mr. Taiwo Oyedele, head of the tax reform committee appointed by President Tinubu, recently announced at a forum in Abuja that a 25% tax on high-income earners will take effect in January, next year. Additionally, Festus Keyamo, Minister of Aviation and Aerospace Development, had also started implementing taxes on private jet owners who previously avoided such payments—not necessarily due to deliberate evasion, but potentially due to oversight by the relevant regulatory agency.
These actions indicate that the current administration aims to improve conditions for low-income citizens without fully adopting a socialist approach.
These tax reforms are among the initiatives intended to reduce the burden on many Nigerians. Other efforts include conditional cash transfers to vulnerable groups and significant investment in the Compressed Natural Gas (CNG) initiative, which offers a more affordable alternative to petrol and aims to cut transportation costs—a major concern for many Nigerians as transportation is a pivotal factor driving the cost of living crisis.
Beyond these policies designed to mitigate the effects of subsidy removal and exchange rate unification, which led to the naira’s devaluation under President Tinubu’s reforms, the country’s foreign reserves have increased to about $38 billion, thanks to efforts by the finance team, including the Central Bank of Nigeria (CBN). The heads of the two economic management organs of government, Wale Edun and Yemi Cardoso, have also reported positive developments in some of economic fundamentals of our country such as the percentage of income dedicated to debt management dropping from 92% to 68% and positive Foreign Direct Investment, FDI, inflow into the economy.
Despite these highlighted improvements and efforts to create a safety net to cushion the impact of reforms on the poor, the nation faces widespread socioeconomic challenges, leaving many Nigerians struggling. However, it’s important not to succumb to a victim mindset in these difficult times. As humans, survival often comes from being cautious of the unknown, but psychology suggests that thriving requires a shift to a determined, ‘no retreat, no surrender’ attitude to adapt to tough circumstances.
For too long, many Nigerians have seen themselves as victims of harsh government policies without acknowledging their own role in the current situation. While the economic difficulties affecting a large portion of the population have roots in the actions of corrupt officials and politicians, they are often facilitated by citizens who sell their votes during elections, making many complicit in the cycle of corruption that has hindered progress in the country.
This complicity makes all Nigerians, in a way, participants in the consequences of corruption, which is widely recognized as a major barrier to the country’s development. The challenge is one of shared responsibility of all citizens, as corruption pervades government institutions, political offices, and electoral processes.
This issue of wrong-headed policies hobbling productivity and promoting consumption as well as unbridled graft in the public sector have significantly stalled progress throughout Nigeria’s 64 years of independence, and the current administration is attempting to address it through significant reforms. While a direct confrontation with corruption may not be the immediate priority of incumbent administration due to the need to prioritise and focus on key areas, such as reducing financial leakages, increasing revenue through higher oil production, job creation to lower unemployment (currently at 33%), and curbing inflation (now at 32.7%), the fight against corruption can become a priority once these initial goals are met.
By and large, while the country continues to face considerable challenges, in many ways, all Nigerians are implicated in the systemic dysfunction that has marked the nation’s history since independence and we must resolve to collectively move our country forward by making the sacrifice today for a better tomorrow.
Let me explain why it’s essential for us to step out of our comfort zones and confront the turbulent times brought on by ongoing reforms necessary to build the momentum needed to overcome current challenges. No one enjoys undergoing surgery, but sometimes it’s the only way to cure a serious health issue, leaving one with no choice but to accept it in hopes of regaining health after the removal of a tumor or cancer.
This analogy mirrors the situation many Nigerians face today. It’s a hard reality for many to accept, but life is becoming increasingly difficult and we must seek to rise above the fray. While there is hope for improvement, the widespread complaints about the current hardships are alarming. Many Nigerians are anxious about the long and challenging road ahead before they can transition from hardship to prosperity. This concern was echoed and further accentuated by Indermit Gill, a Senior Vice President of the World Bank Group, during the recent Nigerian Economic Summit Group’s 30th anniversary in Abuja from October 16-18.