Tinubu’s Reforms Outperform Past Administrations in Economic Growth, Attract Foreign Capital — IMPI By Raymond Enoch

The Independent Media and Policy Initiative (IMPI) has declared that President Bola Ahmed Tinubu’s administration has made greater strides in strengthening Nigeria’s economy and attracting foreign capital than previous administrations achieved despite benefiting from substantial oil windfalls.

The policy think tank argued that successive administrations between 1999 and 2015 failed to translate periods of abundant oil revenue into sustainable industrial development, economic diversification and enduring productive assets, leaving the country vulnerable to external economic shocks.

In a policy statement signed by its Chairman, Dr Omoniyi Akinsiju, IMPI said previous administrations largely deployed surplus oil revenues towards short-term consumption, debt repayment and interventions that failed to establish sufficient long-term economic buffers.

The group cited the $12 billion debt clearance involving Paris Club creditors under former President Olusegun Obasanjo and the establishment of the Excess Crude Account (ECA), which it described as lacking constitutional backing.

According to IMPI, disagreements over the distribution of funds in the ECA contributed to its depletion from approximately $22 billion in 2008 to less than $3 billion by 2014, with much of the money reportedly channelled towards recurrent government expenditure rather than critical infrastructure.

The think tank also criticised the foreign exchange management policies of the period, arguing that efforts to maintain an artificially strong naira encouraged cheap consumer imports and contributed to Nigeria’s dependence on imported refined petroleum products while domestic refineries remained largely dysfunctional.

IMPI maintained that the collapse in global oil prices in late 2014 exposed these structural weaknesses, triggering a currency crisis and contributing to Nigeria’s first major recession in decades in 2016, alongside a significant increase in poverty.

It further noted that the economic vulnerabilities inherited from that period contributed to successive current account deficits, which reached approximately $17 billion in 2019 and $15.8 billion in 2020.

Against this historical backdrop, IMPI said the Tinubu administration’s decision in 2023 to unify the foreign exchange market and remove the petrol subsidy represented a fundamental shift from defensive economic interventions towards market-oriented reforms.

Although acknowledging that the measures initially triggered significant inflationary pressures and currency depreciation, the group argued that they had helped reshape Nigeria’s external balances and strengthen its capacity to withstand economic shocks.

“Recognising that defensive interventions and price controls could no longer sustain the economy, bold market corrections were initiated in 2023 under President Bola Ahmed Tinubu’s administration, centred on foreign exchange unification and petrol subsidy elimination,” the statement said.

The policy group added that Nigeria had subsequently recorded a sustained period of current account and merchandise trade surpluses, while gross foreign reserves reportedly increased from $45 billion to $55 billion by the third quarter of 2026.

IMPI described the developments as evidence of the potential benefits of the administration’s reform agenda, arguing that stronger external buffers and improved trade performance could create a more sustainable foundation for economic growth.

“The current policy regime has taken the harder, necessary path—dismantling unsustainable subsidies and market distortions to build a self-sustaining economy backed by real productivity and robust external buffers,” it stated.

The think tank also identified the expansion of domestic refining capacity as a significant development in Nigeria’s economic restructuring, arguing that the country’s growing ability to process crude oil locally could reduce dependence on imported petroleum products and strengthen its position as a regional supplier.

It further highlighted the reported growth in non-oil exports, particularly agricultural commodities, solid minerals and industrial chemicals, as an important component of efforts to diversify the economy beyond crude oil.

IMPI also pointed to improved assessments of Nigeria’s sovereign credit outlook by international rating agencies, including Moody’s, Standard & Poor’s and Fitch, as signs of renewed investor confidence.

According to the group, stronger credit assessments could help lower international borrowing costs and support investment activity in the Nigerian Exchange (NGX), although the broader benefits would depend on sustained macroeconomic stability and stronger domestic productivity.

In a related assessment of Nigeria’s investment outlook, IMPI described the move by global financial services giant JPMorgan Chase to seek a merchant banking licence in Nigeria as a potentially significant development for the country’s financial sector and its quest to attract foreign direct investment.

The group argued that the proposed expansion could strengthen Nigeria’s access to international capital markets, improve the financing of large-scale projects and encourage multinational corporations to consider longer-term investments in the country.

It said the transition from a representative office to a fully licensed merchant banking operation could enable JPMorgan to expand its engagement in trade finance, corporate lending, cross-border underwriting and other specialised financial services, subject to regulatory approval.

According to IMPI, the development could have far-reaching implications for sectors such as energy, telecommunications and industrial production, where access to long-term financing and effective risk management remains critical to investment decisions.

“JP Morgan Chase’s move to secure a national merchant banking licence in Nigeria marks a significant shift in West Africa’s corporate finance landscape,” the group stated.

It added that direct merchant banking capabilities could help reduce the cost and complexity of structuring major investment projects by providing international financing arrangements, commodity hedging and syndicated funding involving domestic and foreign markets.

The group further argued that improved access to international capital markets would benefit Nigerian sovereign and corporate debt issuers while potentially strengthening the country’s investment profile among global pension funds, sovereign wealth funds and private equity firms.

However, IMPI maintained that the significance of JPMorgan’s proposed expansion should be assessed not merely as an endorsement of the Tinubu administration’s economic reforms, but also in terms of its capacity to stimulate productive investment and generate sustainable economic benefits.

The policy group said Nigeria’s investment strategy was increasingly focused on moving beyond short-term foreign portfolio investments towards foreign direct investment capable of financing factories, infrastructure, industrial expansion and other productive assets.

It explained that portfolio investments, which typically flow into financial instruments such as government bonds and Treasury bills, could provide immediate foreign exchange liquidity but were generally more susceptible to changing market conditions than long-term investments in productive enterprises.

According to IMPI, the Central Bank of Nigeria’s strategy under the Tinubu administration had involved attracting high-yielding portfolio investments to help address foreign exchange pressures and strengthen reserves while pursuing structural reforms intended to restore confidence among long-term investors.

The group acknowledged, however, that the attraction of short-term capital through high domestic interest rates could increase borrowing costs for Nigerian businesses and constrain private-sector expansion.

It argued that sustained progress in reducing inflation and improving macroeconomic stability would be crucial to encouraging investors to redirect more capital towards productive sectors.

“For nearly two years, foreign capital prioritised government debt and Treasury bills over physical infrastructure because short-term securities offered attractive yields,” IMPI stated.

The think tank added that as fixed-income yields decline in line with changing monetary conditions, institutional investors and cross-border private equity firms could increasingly consider infrastructure concessions, greenfield projects and direct investments in Nigerian enterprises.

It maintained that converting short-term capital inflows into long-term productive investments would be critical to translating improved investor sentiment into employment generation, industrial growth and broader economic development.

IMPI concluded that the combination of market-oriented reforms, improved external balances, domestic refining capacity and renewed interest from international financial institutions could strengthen Nigeria’s economic prospects.

It stressed, however, that the ultimate test of the reform programme would be its ability to translate macroeconomic improvements into tangible benefits for businesses and households, including increased productive capacity, more jobs, stronger purchasing power and a more diversified economy.