Tinubuflation Eases as Inflation Falls to Two-Year Low — But Poverty Deepens Across Nigeria

After months of relentless price surges, Nigeria’s inflation story is finally showing signs of relief. The country’s inflation rate, which peaked at a record 34.8 percent in December 2024, dropped steadily to 20.12 percent by August 2025 — the lowest in more than two years. The decline followed the government’s rebasing of inflation data in January 2025, a move that gave a clearer picture of price trends under President Bola Tinubu’s sweeping economic reforms.

Economists have dubbed this period “Tinubuflation,” a term describing the inflationary journey shaped by Tinubu’s reform agenda — from the removal of fuel subsidies to exchange rate unification and tighter monetary controls. “This downward trend suggests that these reforms are beginning to work,” said one Lagos-based analyst. “Prices are becoming more stable, the naira is stronger, and foreign investors are returning to the local debt market for the first time in years.” The renewed investor confidence signals cautious optimism in Nigeria’s macroeconomic direction.

However, behind the improving figures lies a sobering reality: poverty is deepening across the nation. The World Bank projects that by the end of 2025, 61 percent of Nigerians — about 139 million people — will live on less than $3 a day, up from 129 million last year. Despite easing inflation, years of weak growth and high living costs have severely eroded household purchasing power. Many families are still struggling to afford basic food and transportation, reflecting both past policy missteps and global economic shocks.

A recent study by Covenant University titled “Effect of Fiscal and Environmental Sustainability Shocks on Macroeconomic Dynamics in Nigeria: A DSGE Perspective” offers deeper insight. The research found that while economic shocks in Nigeria often hit hard, their effects gradually fade as the economy adjusts. This suggests that current hardships may ease over time, especially if government welfare and social investment programs are well-targeted and effectively implemented.

In essence, the numbers show progress — but not yet prosperity. Inflation is cooling, and investor sentiment is improving, yet millions remain trapped in poverty. For most Nigerians, the true test of Tinubu’s reforms will be how soon economic stability translates into lower food prices, affordable transport, and real relief at home. The question now is whether the government’s early wins can turn into lasting recovery, or if the pain of reform will linger far longer than expected.

source: business day