Investors Confidence in Nigeria's Economic Reforms Surges.

Tinubunomics, Nigeria’s economic policy aimed at readdressing the country's economic challenges driven by years of fuel subsidy, corruption, fiscal mismanagement and currency devaluation is now bearing economic fruit.

In 2022, almost 40% of the country’s revenue was spent on fuel subsidies, it also experienced constant currency devaluation leading to many multinationals leaving the country and selling their businesses to local entities.

Since the government of Bola Tinubu, the immediate focus was to remove the fuel subsidies and let market forces determine the fair value of the Naira. The economic reforms are now showing positive signs with investors reacting favourably to these trends 

• Nigeria’s sovereign risk spread has dropped to its lowest since Jan 2020, leading to lower borrowing costs.
• The reforms are having a stabilising effect on the Naria
• Foreign capital in Nigeria's assets increase
• Bond yields are also dropping
• The NGX All Share Index has performed well, up 11% since December 2024

Can the momentum last

While investors' confidence grows, inflation and food prices remain high. Electricity generation and distribution also remain a major challenge, which if resolved has the potential to kick-start an economic revolution. Previous governments have tried to address this issue but have failed. However, the current government seems to be making an effort to lure private capital investors into the sector, but the right regulatory environment is needed to make it happen.