Nigeria’s Economy: Why We Must Not Go Back 

The central question should therefore not be whether Nigerians are experiencing hardship. They are. The more important question is: what condition was the Nigerian economy in before May 2023, what has changed since then, and are the foundations being laid for a stronger economy?

Before 2023, Nigeria had an economy weighed down by expensive fuel subsidies, multiple foreign-exchange rates, weak government revenues, rising debt-service costs and inadequate growth. The World Bank reported that Nigeria’s public revenue averaged only about 7 percent of GDP between 2015 and 2021, far below the global average of about 24 percent. The IMF also warned in 2022 that fuel-subsidy costs and rising debt-service obligations were creating severe fiscal pressures.

In 2022, the economy grew by about 3.1 percent, before slowing to 2.74 percent in 2023. Nigeria was therefore not handing over a healthy economy in May 2023. The incoming government inherited a system with serious structural weaknesses.

President Bola Ahmed Tinubu responded with two of the most consequential economic decisions in recent Nigerian history: the removal of petrol subsidy and the liberalisation of the foreign-exchange market. Both decisions came with an immediate and painful price. Petrol became more expensive, the naira weakened sharply, businesses faced higher costs and inflation accelerated. For millions of Nigerians, the reforms were felt first in the stomach and the transport fare, not in an economic report.

But economic reform should ultimately be judged by whether it corrects the underlying problem.

And increasingly, the numbers suggest that Nigeria is moving in that direction.
Nigeria’s real GDP growth improved from 2.74 percent in 2023 to 3.38 percent in 2024 and about 3.87 percent in 2025. By the second quarter of 2026, growth had accelerated to 4.43 percent. Crucially, this is not simply an oil story. The non-oil sector accounted for more than 95 percent of real GDP in Q2 2026, with services, telecommunications, finance, agriculture and other productive activities contributing significantly.

The international institutions that have closely monitored Nigeria are also becoming more positive about the direction of the economy.

The World Bank says the reforms have helped improve macroeconomic stability, while the IMF says the reforms implemented over the past three years have produced improved macroeconomic outcomes and strengthened Nigeria’s resilience. The African Development Bank similarly reported improvements in growth, inflation, foreign-exchange reserves and the country’s external position.

The credit-rating agencies are sending another important signal. S&P Global Ratings upgraded Nigeria’s long-term sovereign rating from B- to B in May 2026, citing stronger economic fundamentals, higher oil production, increased domestic refining capacity and improvements associated with exchange-rate reforms. Moody’s upgraded Nigeria from Caa1 to B3 in 2025 and subsequently moved the country’s outlook from stable to positive in August 2026, pointing to stronger growth, rising reserves and improved resilience to external shocks.

These ratings should not be interpreted as certificates that Nigeria has become prosperous. They are not. But they matter because international rating agencies assess a country’s ability to manage its finances, meet obligations and withstand economic shocks. When the IMF, World Bank, AfDB, S&P and Moody’s independently identify improvements, Nigerians should take notice.

There is also encouraging commentary from respected Nigerian economic voices.

Dr Ngozi Okonjo-Iweala, former Finance Minister and Director-General of the World Trade Organization, acknowledged that President Tinubu deserves credit for economic stability and said the reforms have been in the right direction. But she also made the crucial point that stability must now translate into stronger growth and better outcomes for ordinary Nigerians.

Former CBN Governor Muhammadu Sanusi II has similarly acknowledged improvements in areas such as revenue, debt-service ratios, fiscal deficits and monetary policy. He has described the government’s major reforms as politically courageous, while arguing that implementation, public spending and food security still require serious attention.

Even Dr Oby Ezekwesili, who has been critical of several aspects of the administration, has acknowledged progress in macroeconomic stability and a calmer foreign-exchange market. Her argument, however, is that stability must ultimately produce productivity, jobs and improved household incomes.

That is perhaps the fairest way to assess the situation.

Nigeria has not arrived; Nigeria has begun to stabilise.

And there is a very important difference.

The average Nigerian does not eat GDP figures. The food seller in Akoko does not pay school fees with a Moody’s upgrade. The ram seller in Mararaba does not buy feed with foreign reserves. The cobbler in Obigbo is not necessarily interested in the technical language of fiscal consolidation.

What he wants to know is simple: Will my business become easier? Will food become affordable? Will electricity improve? Will transport costs come down? Will I get a better-paying job? Will my children have a better future?

Those are legitimate questions, and government must answer them with results.

This is why the next phase of the Tinubu reforms must move beyond stabilising the macroeconomy to delivering prosperity at household level. Government must accelerate food production, expand electricity supply, improve transportation infrastructure, support small businesses, create productive jobs and ensure that public resources are used efficiently. Economic growth that does not improve living standards will eventually lose public confidence.

But while demanding better results, Nigerians must be careful about the alternative being offered by those who want a return to the old economic model.

We cannot return to a system in which government spends enormous amounts subsidising consumption while earning too little revenue to fund infrastructure and social services. We cannot return to multiple foreign-exchange windows that create distortions and opportunities for arbitrage. We cannot continue financing an economy in which debt-service obligations consume resources needed for development.

The answer to today’s economic hardship cannot be to recreate yesterday’s economic weaknesses.

If a leaking roof is replaced, and the new roof still leaks, the sensible thing is to repair it not to bring back the old, collapsing roof.

That is where Nigeria stands today.

The reforms need correction where necessary. They need compassion, transparency and accountability. The poor must be protected from the harshest effects of adjustment. Government must reduce waste and demonstrate that the sacrifices being demanded from citizens are also being matched by discipline in public spending.

But abandoning the reform direction altogether would be a dangerous mistake.

Nigeria’s economy did not become structurally weak overnight, and it will not become prosperous overnight. The important thing is that the direction is changing: growth is strengthening, inflation is coming down from its peak, external buffers have improved, domestic refining capacity is expanding, the foreign-exchange market is more functional and international confidence is gradually improving.

The real challenge now is to convert macroeconomic stability into household prosperity.

President Tinubu should therefore not be judged merely by whether the economy is growing, nor should he be judged only by today’s hardship. He should ultimately be judged by whether these reforms produce an economy that creates jobs, lowers inflation, encourages investment, increases production and gives ordinary Nigerians greater purchasing power.

For Nigerians, however, there is an equally important responsibility: we must demand better without demanding a return to worse.

We can criticise the government. We can demand accountability. We can question its spending. We can insist that Nigerians must feel the benefits of economic growth.

But we must not allow today’s understandable frustration to make us romanticise an economic past that was already unsustainable.

The goal should not be to go back.
The goal should be to go forward and make sure that the recovery being recorded in the statistics eventually becomes prosperity in the homes and businesses of ordinary Nigerians.