A response to Professor Farooq Kperogi.
By Joshua Danladi Ephraim
Professor Farooq Kperogi has written passionately, about the unbearable energy and cost-of-living crisis confronting Nigerians. I do not quarrel with the central fact underlying his intervention:
Nigerians are suffering.
Indeed, there is sufficient evidence to establish that the hardship is real, widespread and severe. The World Bank reports that, notwithstanding improvements in macroeconomic stability, household incomes have not fully recovered and poverty remains very high. The IMF estimated national poverty at about 63 per cent in 2025 and reported that approximately 27 million Nigerians faced food insecurity in the latter part of that year.
So this is not a matter that should be dismissed as political propaganda.
But there is another question which must be asked:
WHAT CAUSED THIS CRISIS, AND WHAT IS THE CORRECT ECONOMIC MEDICINE?
That is where I respectfully part company with Professor Kperogi.
NOMINAL PRICE IS NOT THE SAME THING AS ECONOMIC BURDEN
Professor Kperogi compares the Nigerian petrol price with petrol prices in Texas, Georgia and other countries and arrives at a striking conclusion: if petrol costs approximately the same per litre in Nigeria and in some American states, why should Nigerians regard the Nigerian price as intolerable?
The comparison is rhetorically powerful.
Economically, however, it is incomplete.
The price of a commodity cannot be meaningfully compared across countries without considering income, purchasing power, productivity, taxation, transport systems, exchange rates, public services and the structure of the respective economies.
A litre of petrol costing the equivalent of ₦1,400 in the United States does not impose the same economic burden on an American earning several thousand dollars a month as ₦1,400 imposes on a Nigerian earning ₦70,000 a month.
That part of Professor Kperogi’s argument is actually useful—but it proves something different from what he appears to intend.
It proves that the Nigerian problem is not simply the nominal price of petrol.
It is the relationship between the price of petrol and the income of the person who must buy it.
That is a much more important economic question.
THE MIDDLE CLASS HAS BEEN SQUEEZED
This is why I believe the Nigerian crisis should be understood beyond the petrol pump.
The most disturbing development is the destruction of purchasing power.
Nigeria increasingly appears to be developing a very narrow band of people who can absorb the rising cost of living, alongside a very large population whose incomes have been severely weakened in real terms.
The traditional middle class—salary earners, professionals, small and medium-sized business owners, civil servants, teachers, young professionals and other people who once lived with some reasonable degree of economic security—is being squeezed from both directions.
Their nominal incomes may have increased.
But nominal income is not the same thing as real income.
If your salary increases by 20 per cent while the cost of food, transportation, housing, electricity and other necessities rises by substantially more, you have received a nominal increase but suffered a real decline.
This is why economic statistics must always be interpreted carefully.
THE REAL TRIGGER WAS NOT ONE POLICY ALONE
I would therefore resist the temptation to blame everything on the removal of the petrol subsidy.
That is too simple.
The present crisis is better understood as the product of several reforms and structural weaknesses interacting with one another.
The most important were:
1. The removal of the petrol subsidy and movement towards market-based fuel pricing;
2. The liberalisation and unification of the foreign-exchange market;
3. The consequent sharp depreciation of the naira;
4. Nigeria’s heavy dependence on imported goods and imported inputs;
5. High transportation and energy costs;
6. Weak domestic productive capacity;
7. Tight monetary conditions and fiscal pressures; and
8. The inadequacy of compensatory measures to protect household purchasing power.
The World Bank itself acknowledged that the new exchange-rate policy and petrol reform were necessary components of macroeconomic stabilisation but also expressly recognised that, in the short term, they added to intense pressures on households and firms.
That is a crucial admission.
THE NAIRA QUESTION
In my view, the exchange-rate issue deserves far more attention than it receives in ordinary political debate.
Nigeria is not yet a sufficiently productive economy to absorb a massive exchange-rate adjustment without serious consequences for consumers.
We import machinery.
We import pharmaceutical products and inputs.
We import industrial components.
We import vehicles and spare parts.
We import chemicals.
We import many food items and agricultural inputs.
We import energy-related equipment and other productive inputs.
Even goods produced locally frequently contain significant imported components.
When the naira loses substantial value against the dollar, the effect does not stop at foreign exchange dealers.
It travels through the entire economy.
The importer pays more.
The manufacturer pays more for imported inputs.
The transporter pays more.
The wholesaler pays more.
The retailer pays more.
And eventually the ordinary consumer pays more.
This is how exchange-rate policy becomes a bread-and-butter issue.
It is not an abstract monetary question.
BUT LET US BE FAIR ABOUT THE REFORMS
This is where intellectual honesty is required.
The World Bank and IMF are not saying that Nigeria’s reforms have produced no benefits.
Quite the contrary.
The IMF’s 2026 assessment says that the reforms since 2023 have strengthened macroeconomic stability, rebuilt external buffers and improved foreign-exchange market functioning. The World Bank similarly reports stronger external and fiscal positions and continued economic growth.
Therefore, the argument cannot honestly be:
“Everything Tinubu has done is economically wrong.”
That would be false.
The more defensible argument is:
“The reforms may have corrected important macroeconomic distortions, but the social cost of the adjustment has been extraordinarily high, and the benefits have not yet been sufficiently transmitted to the ordinary Nigerian.”
Even the IMF acknowledges this tension.
Its 2026 assessment says that strong reforms have improved macroeconomic outcomes, while simultaneously stating that conditions remain difficult, poverty is high, and food insecurity remains serious.
That is precisely the distinction we must make.
WAS THERE REALLY “NO SUBSIDY”?
Here I would slightly modify Professor Kperogi’s argument—and my own position would also differ from those who say that the subsidy never existed.
There was a real fiscal mechanism by which government absorbed the difference between regulated pump prices and the cost of supplying petrol.
The World Bank recorded that after the May 2023 announcement, NNPCL raised prices towards cost-recovery levels and that retail petrol prices increased by approximately 170 per cent.
So it would be inaccurate to say that there was absolutely no subsidy.
But that does not end the argument.
The more important question is:
WHAT EXACTLY WAS THE GOVERNMENT SUBSIDISING, HOW WAS IT CALCULATED, WHO BENEFITED FROM IT, AND WHAT SHOULD HAVE REPLACED IT?
The old system was notoriously opaque.
And there is a legitimate argument that Nigeria should move away from the simplistic binary of:
SUBSIDY = BAD
and
MARKET PRICE = GOOD.
Economic policy is more complicated than that.
THE DANGEROUS ASSUMPTION
The dangerous assumption is that once a price is allowed to rise to a “market” level, economic efficiency automatically follows.
It does not.
Markets operate within particular economic structures.
A market price that is rational in a highly productive, high-income economy may be socially devastating in a low-productivity, low-income economy.
The question is not whether Nigeria should have markets.
Of course it should.
The question is whether Nigeria’s productive capacity, wages, infrastructure, energy system and social protection are strong enough to absorb market prices without destroying millions of households.
That is the question that should occupy us.
THE PAIN MAY BE NECESSARY—BUT WHO BEARS IT?
There is another important economic principle.
Sometimes the cure for an economic disease is painful.
Sometimes there is no painless adjustment.
A country that has lived beyond its means, maintained distorted exchange rates, accumulated fiscal vulnerabilities and relied excessively on imports cannot correct all those distortions without somebody bearing a cost.
I therefore do not subscribe to the simplistic argument that every painful reform is automatically a bad reform.
But there is a corresponding principle:
If the medicine is painful, the doctor must have a clear treatment plan.
And the patient must be protected during the healing process.
That is where government has a special responsibility.
If government tells citizens:
“Accept today’s suffering because tomorrow will be better,”
then government must demonstrate:
HOW?
WHEN?
THROUGH WHAT MECHANISM?
And:
WHO WILL BENEFIT?
WHERE I THINK PROFESSOR KPEROGI IS RIGHT
Professor Kperogi is right to insist that government cannot become indifferent to the suffering of citizens.
He is right that energy prices have consequences far beyond the filling station.
He is right that transport costs feed into food prices.
He is right that fuel prices affect businesses.
He is right that government intervention is not necessarily an economic sin.
And he is right that the social consequences of economic policy must matter.
But we must go beyond the comparison of petrol prices between Nigeria and America.
The real comparison should be:
PETROL PRICE RELATIVE TO INCOME.
PETROL PRICE RELATIVE TO PRODUCTIVITY.
PETROL PRICE RELATIVE TO PUBLIC TRANSPORTATION.
PETROL PRICE RELATIVE TO ELECTRICITY AVAILABILITY.
PETROL PRICE RELATIVE TO THE COST OF FOOD.
PETROL PRICE RELATIVE TO THE PURCHASING POWER OF THE MINIMUM WAGE.
That is where the Nigerian tragedy becomes clear.
WHAT, THEN, SHOULD WE BE DISCUSSING?
We should stop arguing endlessly about whether Nigerians are entitled to cheap petrol.
The better question is:
HOW DO WE MAKE ENERGY AFFORDABLE WITHOUT DESTROYING THE PUBLIC FINANCES?
That requires a much broader policy conversation.
Nigeria must expand domestic refining.
Nigeria must increase domestic production.
Nigeria must reduce its dependence on imported inputs.
Nigeria must strengthen agriculture.
Nigeria must build reliable electricity.
Nigeria must improve transportation infrastructure.
Nigeria must support productive enterprises.
Nigeria must create jobs whose wages rise with productivity.
Nigeria must develop a social protection system capable of cushioning citizens during major economic adjustments.
And above all, Nigeria must become a PRODUCING ECONOMY.
Because there is a fundamental contradiction in trying to solve the cost-of-living crisis in a country that consumes more than it produces.
THE REAL DISEASE
For me, therefore, the petrol crisis is a symptom.
The deeper disease is low productivity combined with excessive import dependence, weak institutions, inadequate infrastructure, low incomes and an economy that has not created sufficient productive employment for its rapidly growing population.
Exchange-rate depreciation then transmits those weaknesses throughout the economy.
Fuel-price reform magnifies them because transportation and energy are embedded in virtually every economic activity.
And inflation then erodes the purchasing power of the citizen.
This is why merely reducing the price of petrol, without addressing the productive structure of the economy, cannot permanently solve Nigeria’s economic problem.
We could reduce petrol from ₦1,400 to ₦600 tomorrow.
If Nigeria continues importing almost everything, if productivity remains low, if electricity remains unreliable, if the naira remains under pressure and if wages remain disconnected from productivity, another crisis will eventually emerge elsewhere.
THE FINAL QUESTION
This is why I would urge Professor Kperogi—and all of us who are concerned about Nigeria—to move the conversation from:
“Why is petrol ₦1,400?”
to:
“Why does a Nigerian economy with enormous human, agricultural, mineral and petroleum resources produce so little relative to what it consumes?”
That is the question.
The petrol pump is only where the citizen sees the problem.
The problem itself is much deeper.
And that is why we must distinguish between the CAUSE, the TRIGGER, the SYMPTOM, and the CURE.
The removal of the petrol subsidy was a major trigger of the immediate price shock.
The exchange-rate reform magnified that shock.
Import dependence transmitted it throughout the economy.
Weak productive capacity made it more painful.
Low incomes made it unbearable.
And inadequate social protection left millions of Nigerians exposed.
To blame everything on subsidy removal is therefore too simplistic.
To defend everything in the name of “reform” is equally simplistic.
A serious country must be capable of doing both things at once: correcting its economic distortions AND protecting its citizens from the consequences of the correction.
That, in my view, is the real economic challenge before Nigeria.
Not whether we can make Nigerians pay the “market price.”
But whether we can build an economy in which Nigerians can actually AFFORD the market price.
That is the difference between economic reform and economic transformation.
End
Chief Joshua Danladi Ephraim writes from Abuja