If an average Nigerian were to be asked the question, “Who is responsible for the current poverty crisis in Nigeria?”, not a few would point accusing fingers in the direction of the incumbent president, Bola Ahmed Tinubu. This may be justified by the fact that it is under his watch that poverty has reached its highest level in Nigeria, with 133 million out of a population of about 230 million Nigerians classified as multidimensionally poor, according to the most recent World Bank survey, a figure also cited by an EU diplomat Gautier Mignot.
In the reckoning of that same average Nigerian, the bold but painful sweeping reform measures introduced over the past roughly three and a half years by Tinubu’s administration would be the easiest culprits to blame for the poverty crisis in Nigeria.
In light of the above, it may appear paradoxical to some Nigerians, especially those in the opposition, that the title of this intervention is: Nigeria Is at War Against Poverty, are Tinubu’s Reforms the best Weapons Against Poverty?
They may wonder: How can Tinubu, who allegedly caused poverty in Nigeria through his sweeping reforms, be waging a war against the very poverty of which he is purportedly the architect?
That is a paradox, is it not?
The mindset above is probably the reason the opposition seized upon Tinubu’s recent statement attributing poverty to the opposition at the commencement of his campaign in Kaduna on October 24.
But Tinubu was probably not referring to the present opposition, since the causes of poverty in Nigeria go all the way back to the 1970s, when an oil windfall arose from an armed conflict between Israel and Egypt, known as the Yom Kippur War. The Arab world, which was the world’s main source of petroleum products, sided with Egypt, resulting in the quadrupling of crude oil prices from $3 to $12 per barrel.
What Nigeria did with the revenue windfall arising from the Yom Kippur conflict in the early 1970s, compared with what Indonesia, a nation with similar socioeconomic fundamentals and a population comparable to Nigeria’s, did with its own windfall, is a case study in development economics that received attention in universities.
We will dwell on that shortly.
But in the interim, I believe readers are anxious to find out how Tinubu’s reforms are weapons against poverty.
So, below is the justification for the title of this article.
There are five (5) major relief measures that form part of Tinubu’s arsenal against poverty, introduced since October 2026, all ahead of the January 16, 2027 presidential election:
- Oil Price Discount — N66 Per Litre
This started on October 1 as an Independence Day promotion and was extended to October 31.
Although opposition parties have tagged the measure a return to the subsidy regime, NNPC Retail says it is merely foregoing its margin, which is less than 5% of the pump price.
- Price Modulation
Price modulation is aimed at making N1,350 per litre the ceiling price. What this means is that the FGN is negotiating a ceiling of N1,350 per litre on ex-gantry/landing costs. This implies that when the global price ceiling moves up, refiners and importers will absorb the losses and recover them later when prices fall. The process is to be reviewed monthly, as the Minister of Finance, Taiwo Oyedele, says the “price should not follow every swing in crude”.
Although these two initial measures look good on paper, they are too cumbersome to implement within a public-sector structure. Hence, they have remained largely unimplemented, if not unimplementable.
However, the third measure in the list of weapons being deployed in the war against poverty by Tinubu’s administration is the N70,000 transport allowance, the implementation of which is commencing this November.
Following an agreement with the Nigeria Labour Congress (NLC) on October 27–28, 2026, a monthly transport allowance of N70,000 for all federal government workers for six months (November 2026 to April 2027) was agreed upon.
This is inclusive of arrears of the peculiar allowance dating back to May 2026, to be paid in three instalments.
However, the Trade Union Congress (TUC), which is an umbrella body for another category of civil servants, has rejected the offer. It wants a salary increase instead of an allowance.
But the reality is that the statutory period for renegotiating salaries is not due until next year. Therefore, the TUC may not have legal grounds for rejecting the deal, and its members may miss out on the financial relief that the N70,000 transport allowance could provide.
Another snag may be that the N70,000 transport allowance was negotiated between the NLC and the FGN. Does it apply to workers in the 36 state governments across Nigeria? Since 32 of the 36 states in the federation are controlled by the ruling APC,it may not be difficult for most if not all to comply.
What about workers in the private sector?
I had argued in this column two weeks ago that they are usually not averse to aligning with government wage policies. And given the enormous profits raked in by banks and financial technology firms, which hauled in as much as N6.7 trillion between just eleven banks and roughly N2 trillion for telecommunications firms, only companies in the manufacturing sector might struggle to pay the new N70,000 allowance. This is because manufacturers had faced challenges sourcing funds to procure raw materials until recently.
In any case, with workers’ purchasing power boosted, they will spend more, and manufacturers of fast-moving consumer goods may see growth in their balance sheets.
- N50,000 Direct Cash Transfer to the Indigent.
The fourth measure is the N50,000 direct cash transfer to indigent members of our society. The previous scheme provided N15,000, but Tinubu, at the beginning of his administration, increased the amount to N25,000 before this latest increase.
This National Emergency Relief initiative, which commenced on October 30, more than triples the old rate of N15,000.
Opposition parties, such as the ADC, are calling it an election gimmick, asking: “What can N50,000 buy today?”
Trader Moni, Market Moni and Farmer Moni, which were introduced by the Buhari administration, were also labelled as such by the opposition in the past. Such political criticism, therefore, comes with the territory.
- CNG and Tax Waivers.
Finally, the fifth measure is the provision of CNG and tax waivers for CNG buses, which were supposed to have been rolled out on October 1, as promised.
The package also included the waiving of taxes and duties on petrol and the removal of illegal levies on transport whose intended positive effect is not yet manifest.
Although it has been universally acknowledged that the tough but desirable Tinubu reforms are yielding the desired benefits at the macroeconomic level and it is yet to percolate to the microeconomic level, government has not given up in its effort to make those at the bottom of the pyramid get a reprieve faster than usual.
Hence what all these intentional efforts, and even scramble to combat poverty suggest to me is that they are weapons against the current hardships being contended with by a critical mass of Nigerians still under the yoke of the negative fall outs of the reform measures.
Having laid out what I have tagged Tinubu’s weapons against poverty as detailed above, it is time to return to the narrative about my engagement with the professor of development economics who pointed me to what he is convinced is the origin of poverty in Nigeria which dates back to the 1970s.
Upon reading my article published in this column two weeks ago, titled Bridging Macro and Micro: How to Make Reforms in Nigeria Reach the Kitchen Faster, a very knowledgeable professor, who is an expert in development economics and also a leader of one of Nigeria’s subnational governments, called me on the phone.
He commended me for articulating the fact that the reason policies such as petrol price subsidies at the pump and the centralised policing system, introduced by our leaders in the 1960s and 1970s, became open-ended policies that lasted until May 29, 2023, when President Tinubu ended fuel subsidy during his inaugural speech, and the centralised policing system, which he is also about to dismantle, was that, although laudable, the policies had no end dates.
Commendably, that is a policy formulation flaw that the incumbent administration has now addressed going forward.
The professor, who championed reforms that shaped Nigeria’s financial services sector by pruning down the unwieldy number of banks through an increase in their capital base, also concurred with me that the masses, who constitute about 70% of our population, reside in rural areas. Yet, the palliatives introduced following the removal of petrol subsidy and the floating of the naira have largely been focused on urban dwellers, such as public servants, who constitute a mere 1–2% of the workforce, instead of extending relief to the critical mass of Nigerian farmers and artisans who live in rural areas and constitute the real production base of Nigeria.
He then agreed with my proposition that, instead of concentrating only on palliatives driven by Compressed Natural Gas (CNG) buses for urban dwellers, for which one billion dollars has been budgeted and about half of that amount ($500 million) has reportedly been expended, electric Keke and Okada vehicles, which constitute the real mass transit system in Nigeria, should also be provided for rural dwellers. These vehicles are equivalent to the train systems obtainable in Europe and other advanced economies in terms of their role in mass transportation.
That category of Nigerians is currently on the verge of being asphyxiated by the hardship induced by the removal of both petrol subsidy and the naira’s former exchange-rate controls.
However, the professor had a divergent view from mine regarding my call for a salary award as a better alternative to the petrol price discount and modulation introduced by Finance Minister Taiwo Oyedele, which has failed to materialise owing to its complex and complicated nature.
As it may be recalled, wage award was one of the measures taken by the then Head of State, General Yakubu Gowon, to cushion the pain arising from the oil price shock caused by the conflict between Israel and Egypt in the 1970s, backed by the Arab world. This bears some resemblance to the ongoing armed conflict involving Israel, the United States and Iran, which has been inflicting severe hardship on humanity worldwide over the past eight months.
In the article under reference, I had also mentioned that, apart from petrol pump price subsidies, a huge wage increase, tagged the Udoji Award, was another measure introduced during the Gowon era, when Nigeria faced socioeconomic circumstances similar to those of the 1973 Yom Kippur War period.
I therefore urged President Tinubu to consider adopting a salary award similar to what Gowon introduced under similar circumstances, but modernising it to suit present-day realities as an additional palliative measure.
That was the point of disagreement between me and the professor of development economics, who has since become a public servant and leader in government at the subnational level.
He reminded me that what Nigeria did with the windfall from oil sales in the 1970s, when prices quadrupled from $3 to $12 per barrel, compared with what Indonesia, a nation with socioeconomic fundamentals similar to Nigeria’s at the time, did with its own windfall, is a textbook case study in development economics at universities.
Challenged by the development economics professor’s rejection of my salary award proposal, I reflected on the fact that organised labour, represented by the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), was already threatening to embark on a strike if wages were not increased to ameliorate the harsh economic conditions prevailing in our country.
I felt it was better to kill two (2) birds with one stone, to borrow a common Nigerian metaphor. Since a statutory salary increase was, in any case, due next year, I therefore opted for a wage increase.
But the professor reminded me that a wage increase could pose the danger of economic disaster because, as he argued, it could fuel inflation, a negative consequence associated with the Udoji Wage Award of the mid-1970s.
Proponents of the Udoji Award, however, counter that this conclusion is based on a misconception. Rather, they believe that the ouster of Gowon’s administration through a military coup d’état and the subsequent abandonment of the policy made it impossible to achieve its intended objectives. According to this argument, the supporting measures required to strengthen the policy were also not implemented, and things consequently went awry.
I could understand the professor’s point. But given that Nigerians had reached the precipice in their endurance of the pains induced by the reforms, I made the case in my article published in this column last week, titled Tinubu’s Reforms: How Wealth Actually Trickles Down and the Six Channels Nigeria Broke, that although the incumbent administration had ended petrol subsidy, it had not replaced it with production subsidies by channeling some of the funds saved from subsidy removal directly into activities that would provide the masses with a safe landing, rather than relying solely on CNG buses, commercial vehicles and conditional cash transfers.
Commendably, although a wage increase was not awarded, as the wartime Head of State, General Gowon, did in 1973, President Tinubu has, as announced last week, awarded workers a transport allowance of N70,000, with a commencement date of November 1, for a period of six months.
This is in addition to the existing N70,000 minimum wage, bringing the total take-home pay to N140,000, just N10,000 less than the N150,000 I recommended in my intervention in this column last week.
Not bad, right?
In addition, N50,000 has been announced as a direct payment to more than ten million indigent Nigerians, an increase from the N15,000 previously provided to beneficiaries already on the register of the Ministry of Humanitarian Affairs and enjoying the government’s largesse.
If indeed the needy in society are reached, indigent Nigerians will have something to look forward to as they celebrate Christmas and the New Year with renewed hope. They may also be more inclined to vote on January 16, hopefully for President Tinubu, who would have put smiles on their faces, as it were.
In my view, the policy measures enumerated above are weapons that President Tinubu has deployed at tactical levels as weapons against poverty while he redoubles efforts in ensuring that the growth at the macroeconomic level does not only trickle to the microeconomic level but faster.
At this juncture, having concluded that it is appropriate to refresh readers’ memories about what Nigeria did with its oil windfall in the 1970s, compared with what Indonesia did with its own, and to share the experience with Nigerians, I started digging into the archives.
So, I crave the indulgence of readers to permit me to share what I found out about the opportunity Nigeria missed in the 1970s to become as prosperous as Indonesia.
So, first of all, let us put things in context by comparing what Nigeria did with its windfall with what Indonesia did with its own in the mid-1970s.
As I pointed out earlier, the comparison between Nigeria and Indonesia is a classic case study in development economics, as the professor I earlier referenced reminded me.
That is because both countries had roughly the same starting point in 1965 and benefited from the same oil shock in 1973–74. However, they experienced opposite outcomes because of the way their respective oil windfalls were either mismanaged or well managed.
By way of putting things in a broader perspective, below is the setting for both nations in the mid-1960s.
In 1965, Nigeria and Indonesia looked remarkably similar:
- They had comparable GDP per capita, estimated at between $90 and $100.
- Both were oil exporters, but their economies were largely agrarian.
- Both were under military regimes or autocratic rule.
- Their populations had similar growth rates.
Then, in 1973, oil prices quadrupled, and both nations received multibillion-dollar windfalls.
What did Nigeria do with its windfall?
The short answer is that it spent it, as some would argue, recklessly.
According to information I gathered from a brief research exercise, Nigeria embarked on an import binge, resulting in the following:
(a) The Cement Armada.
Nigeria’s first oil boom scandal whereby our sea ports were flush with containers carrying materials to rebuild the country after the war- roads, airport, stadium etc all at once.
(b) The Udoji salary awards, which increased civil servants’ pay by over 100%.
(c) Universal free education, which the government could not adequately fund and which is a malaise Tinubu’s admnistration is trying remedy via NELFUND .
All these took place in the mid-1970s, and that lack of financial prudence is believed by development economists to be one of the origins of poverty in Nigeria.
On top of that spending binge, the naira was also kept strong to make imports cheap, thereby supporting the increasingly extravagant taste for foreign goods that Nigerians had developed over locally sourced alternatives. This helps explain the philosophy underpinning the current administration’s policy direction: “Let’s produce what we consume and consume only what we produce.”
That appears to be the philosophy behind lndonesia’s success where Nigeria failed in the 1970s and the origin of the current economic doldrums from which Tinubu is struggling to convince Nigerians it is pulling the country out from.
The situation whereby Nigerians’ preference shifted towards foreign goods simply because the naira was overvalued, allowing them to purchase more from overseas, is the policy direction that development economists argue contributed to the decline of agriculture.
Can we all remember the groundnuts, cocoa and palm oil exports that we often romanticise when recalling the period when they were produced in abundance in Nigeria?
Their production eventually collapsed, partly because of the shift in our consumption preferences towards imported goods.
This is a classic case of the Dutch Disease because that approach to economic management left Nigeria with virtually no savings, as the oil windfall was channelled into recurrent expenditure, what we refer to these days as consumption.
Secondly, it centralised revenue generation around one resource — oil — while neglecting other critical minerals and productive sectors. As the Federal Government took 80% of oil revenues, state governments became less inclined to generate internally generated revenue (IGR).
Consequently, Nigeria became essentially a resource-dependent, revenue-sharing federation, as 80% of oil revenues accrued to the Federal Government, while there was little incentive to develop non-oil resources except for the states to wait for Federation Account Allococation Commitee , monthly FAAC meeting to receive revenue from the FGN . Arising from the above, agricultural products that had previously been cultivated on a large scale, resulting in economic booms represented by groundnut pyramids, cocoa and cotton warehouses, among others, declined. Similarly, equally, abundant solid and rare-earth minerals were no longer adequately prospected for or harnessed.
Thirdly, when the boom period ended and oil prices fell in 1982, Nigeria borrowed against its dwindling revenue.
So, instead of adjusting to the new reality, our country borrowed $20 million in 1982, leading to a debt trap by 1985, the consequences of which we are still dealing with today, at an estimated debt servicing cost of N4 trillion annually.
The fourth way Nigeria mismanaged its oil windfall was by neglecting other sectors of the economy.
For instance, there was no adequate investment in refining crude oil, as the government failed to pay sufficient attention to its four refineries. Consequently, Nigeria began importing refined petroleum products even while exporting crude oil. This is a trend that the Dangote Refinery, with its 650,000-barrel-per-day single-train capacity, began to reverse roughly three to four years ago when it came on stream.
Remarkably, as a consequence of the mismanagement of the windfall, manufacturing’s contribution to GDP fell from 10% to 5%. It still hovers around 8% today, compared with approximately 25% in Indonesia, our peer nation.
The grim consequence of the mismanagement of the 1970s oil windfall is that Nigeria’s per capita income in 2025 was lower than it was in 1980.
What did Indonesia do differently?
In comparison, below is what Indonesia did, relying on the technocrats serving under its then Head of State, Suharto. They were known as the Berkeley Mafia, a group of US-trained economists led by Widjojo Nitisastro.
They were, in many ways, the equivalent of our own super permanent secretaries at the time, led by the likes of Allison Ayida, Philip Asiodu, Ahmed Joda, Olabode Wey, Musa Daggash and Ibrahim Damcida, among others. Most of these Nigerian technocrats were also products of the prestigious UK university system, particularly Oxford and Cambridge, just as their Indonesian counterparts were products of elite American institutions.
Yet they were embarrasingly short sighted to plug our country into consumption spiral as if there was a bazaar.
First, Indonesia saved and sterilised its oil windfall by introducing a balanced-budget rule. Its leadership ensured that oil revenues above the baseline were channelled into offshore reserves held by the central bank rather than being spent through the budget.
Basically, it could not freely spend its oil windfall.
The second wise decision was to devalue its currency, the rupiah, to protect farmers. In other words, it deliberately devalued the rupiah by 50% in 1978, thereby making imports more expensive and exports more competitive. This helped keep agriculture profitable.
Given that some presidential candidates in Nigeria campaigned on the promise to make the naira be at par with the US dollar, the level of economic illiteracy of some of our leaders which is monumental is laid bare.
It also invested its windfall in building 61,000 primary schools between 1973 and 1978.
With its oil windfall, Indonesia embarked on a Green Revolution through fertiliser subsidies and the cultivation of high-yield rice varieties. As a result, it became self-sufficient in rice production by 1984, having previously been the world’s largest rice importer.
It also invested considerable resources and effort in family planning and rural healthcare.
The third thing Indonesia did with its windfall was to invest in boosting its productive capacity by using oil revenues to build Krakatau Steel, fertiliser plants and LNG infrastructure. These investments subsequently generated non-oil foreign exchange earnings for the country.
Comparatively, it took Nigeria several decades for the Nigerian LNG to come on stream and Ajaokuta steel similar to Krakatau in lndonesia has remained uncompleted decades after.
Fourth, it maintained fiscal discipline and therefore avoided the kind of Udoji-style wage binge that occurred in Nigeria.
As a result of such foresight, Indonesia was better positioned to adjust when oil prices fell in 1982. It cut projects, devalued its currency again in 1983 and subsequently deregulated its economy.
It still beats me hollow why Nigeria chose the path of consumption instead of the production-oriented path taken by Indonesia. Consequently, Nigeria has suffered from the infamous resource curse, while Indonesia’s economy is now approximately four times the size of Nigeria’s.
The reason is that while Indonesian leaders did their homework, their Nigerian counterparts embarked on a spending spree and a consumption jamboree.
That perhaps justifies President Tinubu’s quip during the launch of the APC campaigns on October 24 in Kaduna, when he attributed poverty to the opposition.
I would like to assume that he meant to say our past leaders were responsible for the poverty Nigerians are suffering today, rather than the opposition, as reportedly stated.
Frankly, although l am not President Tinubu’s spokesperson , even though l have been tagged as such by those opposed to the president’s politics, I would like to see the poverty-mitigation measures being proposed by the Tinubu administration implemented so that long-suffering Nigerians can finally exhale and enjoy the fast-approaching Yuletide and new year festivities.
In my conclusion last week, I had promised to discuss how entrepreneurship can facilitate the faster convergence of Nigeria’s macroeconomic and microeconomic realities.
However, the raft of poverty-alleviation policies introduced by the administration in October alone took priority over my original intention.
Next week, I hope to fulfil that promise, as I cannot wait to share my perspective on how Americans suffered during the 1930s, in what has come to be known as the Great Depression, and what the country did right to emerge as the richest and most powerful nation on planet Earth today. The question now is has President Tinubu borrowed from the socioeconomic development playbook of President Surharto of lndonesia which his successors have built upon to put the nation on enviable global platform and comity of nations?
Could Nigeria and Nigerians be going through their own Great Depression experience and would our nation like the USA after The Great Depression emerge as the most robust and a highly sought after nation on the continent of Africa as the reward for the discomfort they are presently enduring ?
President Tinubu can not afford to dissappoint the millions of Nigerians who have anchored their hope for better life and even destiny on him
Magnus Onyibe,is an entrepreneur, public policy analyst, author, democracy advocate, development strategist, an alumnus of the Fletcher School of Law and Diplomacy, Tufts University, Massachusetts, USA, a Commonwealth Institute scholar, and a former commissioner in the Delta State government. He sent this piece from Lagos.
