WIREDGOV

To secure long-term growth, the government must resist the temptation to fight inflation by letting the naira strengthen against the dollar.

Two years after electing Bola Tinubu as president in February 2023, Nigerian voters have good reasons to feel traumatized by their choice. The value of the naira has collapsed, petrol prices have quadrupled following the withdrawal of motor fuel subsidies, and food prices are more than 80 per cent higher than when the election was held. Poverty, which blights the lives of more than half of the population, has risen.

Yet President Tinubu’s economic reforms give Nigeria the best hope for sustainable growth that it has had for decades. The path the reform process takes next will be crucial for the country’s future. 

At the centre of the reforms has been Tinubu’s decision to allow a very substantial devaluation of the naira, which has fallen from 460 to the dollar around the 2023 election, to just below 1,500 now. Nigeria’s currency adjustment is one of the largest anywhere for years: only the Ethiopian birr has seen a bigger move recently.

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