Nigerians may wait 12–20 years to fully feel benefits of Tinubu’s reforms, economists say

Nigerians may have to wait between 12 and 20 years to fully experience the benefits of President Bola Tinubu’s economic reforms, according to economists who say the measures are more likely to deliver gradual improvements in productivity and real incomes than immediate relief from high prices.

The economists, who spoke to Businessdailyng, said major structural reforms typically involve a difficult adjustment period before their benefits become fully visible across the wider economy.

According to them, the reforms could eventually strengthen Nigeria’s productive capacity, attract investment and improve living standards, but the transition is likely to remain painful for households and businesses in the short to medium term.

They added that the speed and extent of the benefits would depend heavily on policy stability, infrastructure development, the rule of law and sustained investment in productive sectors.

What you should know

Economic reforms are not always designed to produce immediate improvements in household purchasing power.

Structural reforms often seek to correct underlying distortions in an economy, even when doing so initially increases costs for households and businesses.

For Nigeria, the removal of the petrol subsidy and the liberalisation of the foreign exchange market significantly changed the economic environment.

While these measures were intended to reduce fiscal distortions and allow market forces to play a greater role, they also contributed to higher transportation, energy and imported-input costs during the adjustment period.

The economists’ 12–20-year timeframe therefore reflects the idea that the full benefits of structural reforms can take several economic cycles to materialise.

Why the adjustment period can be painful

Reforms can initially create significant pressure because businesses and households must adjust to new prices and market conditions.

The removal of the petrol subsidy, for example, increased the effective cost of transportation and energy for many Nigerians.

Similarly, the liberalisation of the foreign exchange market exposed businesses that depend heavily on imported goods and raw materials to greater exchange-rate volatility.

These pressures can reduce real purchasing power in the short term, particularly when nominal incomes do not rise as quickly as prices.

This explains why the existence of economic reforms does not necessarily mean households will immediately feel better off.

Productivity is the key to long-term gains

The economists’ argument rests largely on the expectation that reforms will eventually improve Nigeria’s productivity.

Higher productivity means businesses can produce more goods and services using the same amount of resources.

If productivity improves sufficiently, companies can become more competitive, investment can increase and real wages can eventually rise.

For households, the ultimate measure of whether the reforms have succeeded will therefore not simply be whether inflation falls, but whether real incomes and living standards improve sustainably.

Infrastructure could determine the outcome

The pace of reform benefits will also depend heavily on infrastructure.

Poor electricity supply, inadequate transportation networks, inefficient logistics and other infrastructure constraints increase the cost of doing business in Nigeria.

Even if monetary and fiscal policies improve, businesses may struggle to expand production if they continue to face high operating costs caused by infrastructure deficiencies.

Economists therefore argue that reforms need to be accompanied by sustained investment in infrastructure and productive capacity.

Policy stability remains critical

Another major factor is policy consistency.

Long-term investment decisions require businesses and investors to have confidence that economic rules will remain relatively predictable.

Frequent policy reversals, sudden regulatory changes or uncertainty around taxation and foreign exchange rules can discourage investment and slow the transmission of reforms into higher productive capacity.

A stable policy environment would give businesses greater confidence to invest in factories, technology, equipment and human capital.

Rule of law and institutions matter

The economists also highlighted the importance of the rule of law and stronger institutions.

Economic reforms are more likely to produce lasting benefits when contracts can be enforced, property rights are protected and businesses can operate under predictable regulatory conditions.

Stronger institutions can also improve investor confidence and reduce the risks associated with doing business in Nigeria.

This could encourage both domestic and foreign investors to commit more capital to productive sectors.

Productive sectors will be crucial

The economists’ assessment also places significant emphasis on investment in productive sectors of the economy.

Nigeria’s long-term growth cannot rely primarily on consumption and imports.

Greater investment in manufacturing, agriculture, energy, technology, infrastructure and other productive industries could increase domestic output and reduce dependence on imported goods.

This would also make the economy less vulnerable to foreign-exchange shortages and external price shocks.

What could make the benefits arrive faster?

The 12–20-year estimate should not necessarily be interpreted as meaning Nigerians will see no improvement until 2038–2046.

Rather, different benefits can emerge at different stages.

Inflation could fall relatively quickly if monetary and supply-side conditions improve.

Investment and production could respond over several years, while improvements in productivity, wages, infrastructure and living standards could take much longer.

The critical issue is whether the reforms create a foundation for sustained economic growth rather than producing only temporary improvements.

The bigger picture

The economists’ assessment highlights one of the central challenges facing the Tinubu administration: balancing short-term economic pain with long-term structural gains.

The reforms have already fundamentally changed important aspects of Nigeria’s fiscal and foreign-exchange framework, but their ultimate success will depend on what happens next.

If policy stability is maintained, infrastructure improves, productive investment accelerates and institutions become stronger, the reforms could gradually translate into higher productivity and real incomes.

However, if these complementary reforms fail to materialise, the adjustment costs could persist without delivering the level of economic transformation Nigerians are expecting.

For now, the key question is not simply how long Nigerians will wait, but whether the reforms currently underway are followed by the investments and institutional improvements needed to make the eventual benefits worth the adjustment.