01/10/2025
MINDSCAPES SERIES VOLUME XII
Renewed Hope, Beyond The Scalpel: Nigeria At 65, Nigeria’s Surgical Path to Economic Health
Barr. Ephraim Okon, PhD.
The 65th anniversary of Nigerian independence in October 2025 finds the nation in a state of profound transition—a patient recovering from a radical, painful economic surgery. The current administration, operating under the philosophical banner of the Renewed Hope Agenda, has insisted that the twin shocks of fuel subsidy removal and exchange rate unification were not optional policies but a Painful Prescription necessary to halt the nation’s systemic financial decay. This milestone, therefore, demands an expansive and sophisticated appraisal: can the ambition of a Renewed Hope overcome the deep-seated flaws that have historically hindered Nigeria’s journey?
The Audacity of the Cut: Renewed Hope, Shock Therapy, and the Crisis of Trust: The Renewed Hope Agenda, spearheaded by President Bola Tinubu's administration, is a comprehensive blueprint designed to catapult the nation into a premier global investment destination. It is the ideological scaffolding for the government's actions, lazar-focused on economic stability, social development, and good governance as the foundation for prosperity. Fundamentally, the agenda seeks to align Nigeria's economic trajectory with the lofty long-term goals of the Nigeria Agenda 2050, which targets significant economic growth and a drastic reduction in poverty.
Nigeria's ambitious Agenda 2050 aims to transform the nation into a high-income economy within three decades by targeting several key developmental and economic milestones. The ultimate objective is anchored on achieving a dramatic GDP Per Capita of $33,328 per annum, which would successfully place the country among upper-middle-income economies. To sustain this transformation, the Agenda is coupled with a necessary Average Real GDP Growth Rate of 7% per annum. Crucially, this economic expansion is intended to be inclusive, with a focus on substantial social uplift: the plan targets the reduction of people living in poverty to just 2.1 million (a massive drop from the estimated 83 million in 2020) and aims to facilitate this growth by generating 165 million new jobs across various sectors by the target year. The Renewed Hope Agenda is the medium-term vehicle intended to accelerate these goals.
Priority Areas of the Renewed Hope Agenda
The agenda is structured around eight pivotal priority areas that lay the groundwork for this transformation:
Reforming the economy to deliver sustained inclusive growth through fiscal responsibility.
Strengthening national security for peace and prosperity, recognising security as the bedrock of development.
Boosting agriculture to achieve food security via modernised farming practices.
Unlocking the potential of the energy and natural resources sector for sustainable development.
Enhancing infrastructure and transportation networks as critical enablers of growth.
Focusing on education, health, and social investment as essential pillars of human capital development.
Accelerating diversification through industrialisation, digitalisation, creative arts, and innovation.
Improving governance for effective service delivery, strengthening institutions, and promoting the rule of law.
This expansive vision of prosperity stands in stark contrast to the economic reality faced in mid-2023. The pre-Tinubu Nigerian economy operated under a self-sabotaging equilibrium, addicted to two powerful, destructive drugs. The first was the colossal, trillion-Naira fuel subsidy—a system that primarily funded corruption, enabled smuggling across borders, and warped the nation’s fiscal priorities. The second was a multi-tiered exchange rate regime that created immense, unearned wealth for a few speculators through rent-seeking activities, while starving the real, productive economy of the foreign exchange it desperately needed for raw materials and machinery.
The Renewed Hope Surgical Madate: For the government, the immediate removal of these destructive drugs —the Shock Therapy— was the initial, agonising step towards fulfilling the promise of Renewed Hope, aiming to restore fiscal sanity and market discipline and transition Nigeria into a private sector-led economy. The policy has already yielded a clear, measurable benefit: the Federal Account Allocation Committee (FAAC) disbursements to the three tiers of government have dramatically increased, creating the first genuine fiscal space in over a decade to fund debt servicing, infrastructure, and the promised social programmes. The fiscal deficit, while still high, has shown signs of narrowing, driven by higher non-oil revenues. This financial stabilisation provides the intellectual rationale for the policy: to exchange short-term pain for long-term structural health.
The immediate consequences, however, have been a crisis of hardship and a subsequent, profound crisis of trust. The inflation rate has ballooned into an existential threat for households, with Headline Inflation stubbornly anchored above 20.12% (NBS Year-on-Year for August 2025) and food prices soaring higher due to insecurity and logistics costs. The market-driven devaluation of the Naira, a necessity to attract legitimate investment, has simultaneously decimated the purchasing power of the average Nigerian. This has exposed the critical fault line in the Renewed Hope strategy: the gap between the "Audacity of the Surgery" and the "Fidelity of the Follow-Through". The slow, often chaotic deployment of a credible social safety net has been the most critical challenge, ensuring that the burden of Renewed Hope’s difficult birth falls disproportionately on the poor and the middle class. As citizens watch the FAAC allocations rise alongside their daily cost of living, the legitimacy of the entire reform package hinges on the visible, demonstrable link between the government’s enhanced revenue and their personal welfare. The administration must urgently transition its narrative from "what we have saved" to "how we have spent it for you," or risk turning necessary reform into a political disaster rooted in public scepticism.
The Energy Pivot: Policy, Private Capital, and the Path to Cost-Efficiency: The economic pain triggered by the subsidy removal is intensely amplified by Nigeria’s decades-old infrastructural failure, most prominently embodied by the crippling energy crisis. The year 2025, however, marks a watershed moment of unprecedented private-sector-led disruption and government policy pivot in the energy sector, which embodies the most tangible aspect of Renewed Hope for economic independence.
The End of the Power Subsidy and the Price of Service: The Renewed Hope era has been defined by the near-total removal of energy subsidies, not just for premium motor spirit but, crucially, for electricity. The decision by the Nigerian Electricity Regulatory Commission (NERC) to enforce a cost-reflective tariff for Band A customers (those promised at least 20 hours of daily supply) effectively quadrupled the cost per kilowatt-hour for this segment. While the government argues this is a necessary evil to attract the estimated $15 billion in annual investment required to fix the power sector, improve liquidity for Distribution Companies (DisCos), and halt the annual $25 billion cost of poor power, the immediate micro-economic effect is devastating. Households now face a punishing increase in their monthly grid expenditure, while local manufacturers—already battling inflation and FX shortages—report that electricity costs have surged to consume over 80% of their monthly operational turnover. This is the cruel, immediate trade-off: citizens and businesses are being asked to pay global prices for a promise of improved service that is yet to fully materialise across the entire spectrum. This pressure on the manufacturing sector risks pushing more companies into imported diesel generators or outright closure, further driving up the cost of local production and undermining the very purpose of economic reforms.
The Gas Answer: Dangote, CNG, and the Logistics Overhaul
The government's definitive, policy-backed response to the high cost of energy and logistics is the accelerated adoption of gas—Nigeria’s vast, underutilised resource—as the primary transition fuel. Led by the Minister of State for Petroleum Resources (Gas Resources), the Presidential Compressed Natural Gas Initiative (PCNGI) is the centrepiece of this industrial strategy, aligning with the broader Decade of Gas initiative. This initiative is an explicit, strategic effort to structurally move Nigeria away from reliance on expensive, imported diesel and petrol for mass transit and industrial power.
These policies have found a powerful partner in the private sector through the Dangote Effect, which is disrupting the logistics sector. The operationalisation of the 650,000 bpd Dangote Petroleum Refinery and its ambitious direct-to-market distribution plan is a practical manifestation of the CNG policy. The refinery’s deployment of a formidable fleet of 4,000 Compressed Natural Gas (CNG) Trucks is an immediate, large-scale fiscal intervention in the transport sector. This strategic pivot to cheaper, cleaner gas-powered logistics, which represents a massive N720 billion investment, is projected to reduce distribution costs by up to 40%, offering an estimated N1.7 trillion in potential annual savings for the supply chain. This 1.7 trillion is not merely a corporate saving; it is a critical micro-economic relief that reduces the cost of getting goods to market, particularly for the 42 million Micro, Small, and Medium Enterprises (MSMEs) whose costs are currently inflated by expensive diesel logistics. The successful integration of this CNG logistics backbone, reinforced by the coming online of additional refining capacity like the 200,000 bpd BUA Refinery, constitutes the most tangible and self-reliant aspect of Renewed Hope for energy independence, directly challenging the high cost of production and easing pressure on the Naira. Furthermore, this focus on gas aligns with Nigeria's new climate targets, which project a mitigation potential of 44 million tons of CO2e from the widespread adoption of electric and CNG vehicles, underscoring the policy's environmental and economic coherence.
The Fiscal Anchor: FIRS, Tax Reform, and the Challenge of Sovereignty.
The enduring failure of past administrations has been Nigeria's debilitating dependence on volatile crude oil for revenue, leaving the federal budget constantly exposed to the instability of global commodity prices. The most compelling counter-narrative to this fragility under the Renewed Hope agenda is the remarkable, digitised surge in non-oil revenue, driven by the aggressive reforms and digitalisation efforts of the Federal Inland Revenue Service (FIRS).
The FIRS, under the leadership of its current Chairman, has strategically leveraged innovative technology like the TaxPro-Max platform and the newly consolidated tax laws (Nigeria Tax Act, 2025) to deliver a foundational shift in fiscal strategy. The Nigeria Tax Act 2025 is a major piece of legislation that repeals and consolidates multiple previously fragmented laws—including CIT, PIT, and VAT—into a single, unified framework, aiming to simplify compliance and broaden the tax base. This systematic approach has paid dividends: by Q3 2025, non-oil revenue collections had surged to an unprecedented N15.67 billion and drove the total collection to a record N20.62 trillion in the first eight months of the fiscal year. This dramatic increase—a 49.7% jump in non-oil taxes—is the financial bedrock of the government's claim to fiscal sovereignty, and the primary, non-debt source of funding for debt servicing and capital expenditure. The FIRS success marks a decisive, psychological break from the nation's oil-dependency.
However, this fiscal success presents a profound governance and equity challenge. While the FIRS’s efficiency creates the necessary fiscal space, the simultaneous widening of the tax net and the introduction of new, stringent levies (such as a controversial windfall tax on banks’ FX gains) place an immense, concentrated burden on the formal sector and citizens already reeling from the compounded effects of the 400% electricity tariff hike and high food inflation.
The intellectual depth of the challenge lies in the Trust Deficit: for the revenue surge to be sustainable, the government must move beyond mere collection figures. The consolidation of tax laws, while simplifying compliance for larger companies, also sees many mid-sized firms losing their previous tax-exempt status, suddenly facing the standard 30% corporate tax rate. This increased pressure on the formal economy, which is easier to track and tax, must be balanced with a renewed effort to bring the vast informal sector into the tax net through simplified, low-burden regimes. Ultimately, the government must visibly and transparently translate the trillions into tangible public goods—reliable power (justifying the tariff hike), enhanced security, and secure infrastructure—otherwise, the expanding tax net will be perceived not as a patriotic duty, but as a punitive extraction from a suffering populace, risking a catastrophic drop in voluntary compliance.
The Chronic Condition: Insecurity, Policy Gaps, and the Minimum Wage Crisis
Beneath the immediate economic pain lies a deeper, chronic political and structural ailment that undermines the longevity of the reforms: a security crisis that directly compromises economic output, and a persistent policy gap on social welfare. The violence across the food-producing Middle Belt and Northwest regions remains the single greatest impediment to the war against inflation. Insecurity acts as a perverse fiscal policy, costing the economy an estimated N1.3 trillion in lost property, infrastructure, and agricultural output. The attendant displacement of farmers and the destruction of farmlands directly fuel the current, devastating rate of food inflation, which disproportionately affects the poor. Therefore, securing the farms and transport corridors is not merely a security matter; it is the most critical fiscal and anti-inflationary policy required, aligning directly with the Renewed Hope Agenda's pillar on Strengthening National Security and Boosting Agriculture. Until farmers can return to their fields without fear, the local food supply will remain constrained, and inflation will continue to erode the benefits of the economic reforms.
This crisis is compounded by the delicate, unresolved negotiation over the National Minimum Wage. Despite the upward review to 70,000 in 2024, the Organised Labour is already demanding a fresh review, arguing that the relentless, multi-pronged inflation has completely eroded the value of that benchmark, rendering it inadequate as a living wage. Indeed, while the FIRS boasts of increased trillions, the real wage of the average Nigerian has plummeted. The fact that some states are pre-emptively raising their wages —Imo to N104,000 and Ebonyi to 90,000 —underscores the national urgency and the regional disparity in fiscal capacity. The delay in finalising and implementing a new, realistic wage floor—one that acknowledges the realities of the market-driven inflation—pits the necessity of fiscal prudence against the urgency of social welfare. This is the ultimate litmus test for the fidelity of the follow-through promised by the Renewed Hope agenda: the FIRS has provided the money; the government must now demonstrate the will and the fairness to spend it in a way that truly cushions the shock of its painful prescription and closes the widening inequality gap.
The Road to Full Recuperation: Global Context and the New Social Contract
The Nigerian patient is recovering in a world defined by geopolitical volatility, where the global operating theatre has been decisively reshaped. The definitive return of "America First" economic policies, coupled with the functional curtailment of the African Growth and Opportunity Act (AGOA) due to global supply chain shifts, provides the most potent mandate for the Renewed Hope agenda: Nigeria must aggressively pursue a self-reliant economic model anchored on domestic capacity. The days of relying on Western concessions for market access are fading; genuine growth must be internal, leveraging initiatives like the $10 billion Diaspora Fund to drive private sector-led development.
The final prescription for sustained growth demands a New Social Contract that clearly defines the roles of government and the private sector to achieve the national target of sustained prosperity. The success stories of Dangote's 4,000 CNG trucks, the BUA project, and the FIRS's revenue performance prove the private sector’s capacity for immense capital deployment and operational efficiency when given a stable policy direction. The government's path to Nigeria’s full recuperation must, therefore, be one of disciplined ex*****on, focusing on three core areas to solidify the Renewed Hope agenda:
First, the government must primarily function as a Policy Formulator and Infrastructure Enabler. The Gas Resources Ministry must accelerate the Gas Master Plan and associated infrastructure—pipelines, mother/daughter stations—to ensure the Dangote-led CNG revolution is replicated nationwide, providing the critical mass needed for affordable mass transit and industrial power generation. This is about enabling the private sector, not competing with it. The recently unveiled climate strategy further mandates a focus on increasing the share of on-grid and off-grid renewable capacity to 52% by 2035, with gas serving as the transition fuel, requiring massive, state-backed grid upgrades. This aligns perfectly with the agenda's pillar on Enhancing Infrastructure and Transportation and Unlocking Energy.
Second, the government must act as a Benchmark Setter and Regulator. Vigorously enforcing quality and competition standards is crucial. This means ensuring that the new, higher tariffs deliver the promised minimum 20 hours of power and that domestic refining competition (Dangote vs. BUA) benefits the consumer, preventing the replacement of a foreign monopoly with a domestic one. This regulatory vigilance is essential for market fairness and promoting the pillar of Improving Governance.
Finally, the government must institutionalise Harnessing the Fiscal Surge to rebuild legitimacy. The administration must legally ring-fence a dedicated percentage of the FIRS's increased non-oil revenue into a visible, audited social safety net fund—a Savings-to-Social-Spending Ratio. This act, by demonstrating a transparent and direct link between tax compliance, responsible expenditure, and public welfare, is the only sustainable way to rebuild the social contract and ensure that the Painful Prescription leads to a shared recovery, allowing the Giant of Africa to finally stand tall on its own two feet.
(Barr. Ephraim Okon, PhD, serves as the Special Assistant to the Governor of Akwa Ibom State on Grassroots Mobilisation. As a lawyer and cultural diplomat, he brings over 17 years of experience in public health and strategic development communication to his work. He is an international development consultant who writes from his hometown of Okon in Essien Udim Local Government Area, Akwa Ibom State.
