An economist, Dr Paul Alaje, and political scientist, Prof Abdullahi Sule-Kano, have cautioned the Federal Government against equating economic stabilisation with prosperity, arguing that millions of Nigerians remain under severe financial pressure despite improvements in some economic indicators.
The experts spoke at the 48th edition of Boiling Point Arena on Sunday night, where they examined the erosion of Nigeria’s middle class and the impact of the rising cost of living on households.
While Alaje acknowledged some gains in public finance management and foreign reserves under President Bola Tinubu’s administration, he maintained that the improvements had yet to translate into broad-based economic transformation or significantly improve the purchasing power of ordinary Nigerians.
Sule-Kano, a former Deputy Vice-Chancellor of Bayero University, Kano, was more critical of the administration’s economic policies, arguing that they reproduced aspects of the Structural Adjustment Programme (SAP) introduced in the 1980s and were worsening the economic vulnerability of workers and the middle class.
The two speakers agreed that the ultimate measure of economic recovery should be whether Nigerians can afford food, housing, healthcare, education and transportation while retaining enough income to save and prepare for unexpected expenses.
The programme, anchored by veteran journalist and communication strategy expert Ayo Arowojolu, was transmitted via Zoom and broadcast live on seven partner radio stations across Lagos, Ogun and Delta states.
The Olowu of Owu Kingdom, Oba Prof Saka Matemilola, chaired the programme and delivered the keynote address.
The discussion was held under the theme: “Where Did the Middle Class Go? How Are Nigerians Surviving the Cost-of-Living Crisis and What Can Government Do to Ease Hardship/Pain?”
Stabilisation is not prosperity — Alaje
Alaje argued that improvements in headline economic indicators should not be mistaken for a recovery that has improved the living conditions of the majority of Nigerians.
He acknowledged the Tinubu administration’s efforts to address longstanding fiscal challenges, including fuel subsidy expenditure and debt servicing, while pointing to the reported increase in foreign reserves as one of the gains recorded under the current economic policy direction.
However, he cautioned that the composition of the gains must be examined to determine whether they reflect a stronger productive economy.
According to him, new borrowings, remittances and other financial inflows have contributed to the improvement in foreign reserves, raising questions about the extent to which the gains reflect sustainable growth in domestic production and productivity.
The economist argued that the country must move beyond stabilising government finances to building an economy capable of generating productive employment, increasing household incomes and making essential goods and services more affordable.
He maintained that the growth of nominal wages would offer little relief if inflation continued to erode the purchasing power of workers.
A salary increase, he explained, could leave a household no better off if the cost of food, transportation, housing, healthcare and education rose faster than its earnings.
Alaje therefore urged policymakers and organised labour to pay greater attention to real income, which measures the actual purchasing power of earnings, rather than focusing exclusively on nominal wages.
He also called for policies that would enable businesses to expand production, create decent jobs and pay wages that could sustain households.
For him, the central challenge is to ensure that any improvement in the government’s financial position translates into tangible benefits for ordinary citizens.
Borrowing cannot replace productive growth
Alaje warned that Nigeria could not achieve sustainable prosperity without strengthening its domestic productive capacity and reducing its dependence on imported finished goods.
He argued that a productive economy should generate sufficient employment and income to enable households to save, businesses to invest and industries to expand.
According to him, low household incomes constrain savings, while inadequate savings limit investment. Weak investment, in turn, depresses productivity and further restricts income growth.
He said the cycle would continue to undermine economic advancement unless the government created an environment that encouraged domestic production, expanded employment opportunities and improved workers’ purchasing power.
The economist stressed that the important question was not simply whether Nigeria’s financial indicators had improved, but whether the country was converting those gains into productive assets, higher incomes and sustainable economic opportunities.
He maintained that a stronger financial position would have limited benefits for the population if it was not accompanied by improvements in living standards.
Sule-Kano: Reforms mirror 1980s SAP
Sule-Kano argued that the economic difficulties facing Nigerians should be examined within the broader structure of the country’s economy, particularly the relationships between production, ownership and the distribution of wealth.
He described the middle class as a transitional social group whose members could either advance towards greater economic security or slide into working-class conditions when their incomes and savings were eroded.
According to him, the current economic pressures are pushing many Nigerians who previously enjoyed a measure of financial stability towards poverty.
The political scientist argued that the Tinubu administration’s economic reforms reflected the underlying principles of the Structural Adjustment Programme introduced in Nigeria in the 1980s, despite being presented under the banner of economic reform.
He questioned whether the current policy direction adequately addressed the needs of ordinary Nigerians, particularly workers whose earnings had become increasingly inadequate to meet basic expenses.
For Sule-Kano, the critical issue was not merely whether the economy was becoming more stable, but who was benefiting from that stability and whether workers could afford a decent standard of living.
He argued that an economy could not be considered genuinely successful if the people responsible for producing its wealth were increasingly unable to meet their essential needs.
He also questioned whether foreign investments, loans and relief programmes were translating into meaningful improvements in the living conditions of the majority.
Sule-Kano maintained that economic development must be assessed partly by the extent to which workers and other productive groups could share in the benefits of national growth.
Middle class bears the brunt
Both speakers identified the weakening of the middle class as a major indication of the economic difficulties confronting the country.
Alaje argued that a financially secure middle-class household should be able to afford decent accommodation, healthcare, education, transportation and utilities while retaining enough income to save, invest and withstand unexpected financial shocks.
He suggested that households which must borrow to meet basic expenses, struggle to pay medical bills and have little capacity to accumulate assets are experiencing a significant decline in economic security, even if their members remain employed.
According to him, the strength of the middle class depends largely on the availability of productive jobs and the ability of households to convert their earnings into sustainable living standards.
Sule-Kano, meanwhile, described the middle class as particularly vulnerable to economic shocks because many of its members lack the accumulated wealth needed to withstand prolonged increases in living costs.
He argued that rising prices and declining purchasing power were forcing some households to abandon previously affordable lifestyles and struggle to maintain their basic needs.
The concerns raised by the two speakers extend beyond Nigerians who have historically lived in poverty to households that previously enjoyed relative financial stability but are now finding it increasingly difficult to sustain their standard of living.
They argued that the weakening of the middle class reflects deeper challenges in creating productive employment, improving incomes and ensuring that economic growth translates into wider social advancement.
Alaje identifies electricity, transport, healthcare
Alaje identified electricity, transportation, education and healthcare as critical areas requiring government attention if Nigeria is to move from economic stabilisation to sustainable transformation.
He argued that unreliable electricity increases operating costs for businesses, particularly those forced to depend on alternative power sources.
These additional expenses, he explained, can affect production, discourage business expansion and ultimately contribute to higher prices for consumers.
He also identified transportation costs as a major factor influencing the cost of living, noting that expensive movement of goods and people places additional pressure on businesses and households.
Alaje cautioned against electricity policies that could further increase costs for consumers without adequate consideration of the implications for inflation, household welfare and business sustainability.
He also stressed the importance of affordable education and healthcare, arguing that access to both services was essential to developing a healthy, skilled and productive population.
Beyond infrastructure and social services, he called for targeted support for small businesses and artisans through access to equipment, skills development and financing.
He maintained that such interventions could help expand economic opportunities, improve productivity and enable more Nigerians to earn sustainable incomes.
Alaje also warned that government relief programmes would be less effective if political considerations took precedence over the actual needs of intended beneficiaries.
He argued that assistance should be directed towards households and communities facing the greatest economic difficulties.
Calls for a production-driven economy
Sule-Kano called for a reassessment of the economic framework underpinning the government’s reforms, arguing that development policies should place productive activity and the welfare of working people at the centre.
He maintained that monetary and fiscal interventions alone would not resolve the country’s economic difficulties without a corresponding expansion in production and employment.
According to him, economic growth must be accompanied by a fairer relationship between the wealth generated by workers and their capacity to meet basic needs.
His position underscored the need to examine not only the performance of key economic indicators but also the distribution of the benefits and costs associated with economic reforms.
Alaje’s emphasis on productivity, employment and real incomes similarly highlighted the need for economic policies that strengthen domestic production and improve the ability of households to afford essential goods and services.
Although the two experts approached the issue from different perspectives, their interventions converged on the need to measure economic progress by its impact on the lives of Nigerians.
The real test of Tinubu’s economic agenda
The discussion at Boiling Point Arena centred on a fundamental question facing the Tinubu administration: can improvements in government finances and other economic indicators be sustained and translated into better living conditions for Nigerians?
For Alaje, the answer depends on the government’s ability to stimulate domestic production, create decent jobs, increase real incomes and improve access to essential services.
For Sule-Kano, it also requires a critical examination of the economic policies driving the reforms and their implications for workers, the middle class and other vulnerable groups.
Both speakers cautioned, in different ways, against treating financial stabilisation as conclusive evidence of widespread prosperity.
An improvement in foreign reserves may strengthen a country’s external financial position, but it does not automatically reduce food prices, lower transport costs, make healthcare affordable or enable households to save.
The challenge, therefore, is to ensure that macroeconomic gains are accompanied by improvements in household purchasing power, productive employment and access to essential services.
For millions of Nigerians grappling with the cost-of-living crisis, the practical measure of economic recovery remains whether their earnings can cover their basic needs and provide a reasonable prospect of financial security.