By Chief Joshua Danladi Ephraim
There is a tendency in Nigeria today to discuss the economy from two extreme positions.
One side says that the economic reforms of the Tinubu administration have rescued Nigeria from an unsustainable economic structure and that Nigerians must endure the temporary pain because the country is finally on the road to recovery.
The other side says that the reforms have simply impoverished Nigerians and that virtually everything the government has done is wrong.
I believe both positions are incomplete.
The truth is more complicated—and therefore more useful.
Nigeria needed economic reform.
But Nigeria also needed a carefully managed transition from reform to recovery and from recovery to prosperity.
That distinction is extremely important.
THE COUNTRY DID NOT ARRIVE HERE IN 2023
Nigeria’s present economic difficulties did not begin on 29 May 2023.
The problems accumulated over decades.
We built an economy heavily dependent on crude oil.
We maintained an expensive and often opaque fuel-pricing system.
We operated multiple foreign-exchange windows that created opportunities for arbitrage and rent-seeking.
We borrowed extensively.
We failed to invest adequately in productive infrastructure.
We allowed electricity supply to remain far below the requirements of a modern economy.
We imported too much of what we consumed.
We allowed domestic production to remain weak.
We failed to create sufficient productive employment for a rapidly growing population.
We allowed corruption and patronage to distort public expenditure.
And we repeatedly postponed difficult decisions.
Eventually, the accumulated contradictions became too large to ignore.
Something had to give.
THE REFORMS WERE NOT WITHOUT ECONOMIC LOGIC
The removal of petrol subsidy, the reform of the foreign-exchange regime, tighter monetary policy and the expansion of government revenue were not inventions without economic rationale.
The IMF’s 2026 assessment is quite explicit: reforms since 2023—including ending fuel subsidies and deficit monetisation, liberalising the exchange rate and tightening monetary policy—have improved macroeconomic stability, reduced fiscal vulnerabilities, rebuilt external buffers and improved foreign-exchange market functioning.
The World Bank says essentially the same thing.
It reports that Nigeria has made meaningful progress in restoring macroeconomic stability, with stronger fiscal and external positions, declining inflation and stronger economic growth.
Therefore, it would be intellectually dishonest to say that the reforms have achieved nothing.
They have achieved something.
The more important question is:
WHAT HAVE THEY ACHIEVED, AND FOR WHOM?
MACROECONOMIC STABILITY IS NOT YET MASS PROSPERITY
This is where the government’s argument must be subjected to a second test.
GDP is growing.
Inflation has fallen substantially from its earlier peak.
Foreign reserves have strengthened.
Government revenues have increased.
The external position has improved.
The World Bank reports that real GDP grew by about 4.2 per cent in the first half of 2026, while projecting average growth of about 4.4 per cent between 2026 and 2028.
These are positive developments.
They should be acknowledged.
But they do not automatically mean that the ordinary Nigerian is prosperous.
The World Bank makes the point clearly: household incomes have not fully recovered and poverty remains high.
The IMF estimates that poverty reached about 63 per cent at the national poverty line and that about 27 million Nigerians faced food insecurity in late 2025.
This is the paradox at the centre of Nigeria’s economic story:
THE ECONOMY CAN IMPROVE WHILE MANY NIGERIANS CONTINUE TO SUFFER.
There is no contradiction in that statement.
REFORM IS NOT THE SAME AS RECOVERY
A reform can correct a structural distortion without immediately improving living standards.
In fact, the correction can initially make living standards worse.
Consider foreign exchange.
If the naira has been artificially supported for years, moving towards a more market-determined exchange rate may correct an unsustainable distortion.
But if Nigeria imports substantial quantities of goods, machinery, raw materials, medicines, equipment and other inputs, a sharp depreciation of the naira immediately raises the naira cost of those imports.
The consequences then spread throughout the economy.
The importer pays more.
The manufacturer pays more.
The transporter pays more.
The trader pays more.
The consumer eventually pays more.
This is one reason the exchange-rate reform produced such a powerful inflationary shock.
The IMF’s research on Nigeria specifically identifies pronounced exchange-rate depreciation—particularly following the 2023 unification of foreign-exchange windows—as one of the historical drivers of inflation.
The lesson is not that exchange-rate reform was necessarily wrong.
The lesson is that exchange-rate reform must be accompanied by a rapid expansion of domestic production.
Otherwise, we liberalise the price of foreign exchange without sufficiently expanding the supply of goods.
THIS IS WHERE PRODUCTION BECOMES THE ANSWER
Nigeria cannot permanently solve inflation by monetary policy alone.
Neither can we solve it by borrowing more money.
Nor can we solve it simply by reducing petrol prices.
Nor can we solve it by distributing cash indefinitely.
Nigeria must produce.
PRODUCTION IS THE BRIDGE BETWEEN ECONOMIC REFORM AND MASS PROSPERITY.
We need to produce more food.
More electricity.
More manufactured goods.
More construction materials.
More machinery.
More pharmaceuticals.
More agricultural inputs.
More digital services.
More exportable goods.
More jobs.
The ultimate objective must be to move Nigeria from a predominantly consumption-dependent economy to a productive economy.
THE GOVERNMENT SHOULD THEREFORE COMPLETE THE SECOND HALF OF THE REFORM
The first phase of the reform has concentrated heavily on stabilisation.
The next phase must concentrate on transformation.
Stabilisation asks:
“How do we stop the economy from deteriorating?”
Transformation asks:
“How do we make the economy produce enough wealth to improve the lives of Nigerians?”
Nigeria now needs the second question.
FIRST: MAKE ELECTRICITY A NATIONAL ECONOMIC EMERGENCY
No modern economy can become genuinely industrial without reliable electricity.
A manufacturer running on diesel generators cannot compete effectively with a manufacturer enjoying reliable grid electricity.
A small business spending a substantial proportion of its income on petrol or diesel to operate machinery cannot build sufficient capital.
A farmer cannot operate modern irrigation and processing systems reliably without affordable energy.
A hospital cannot function efficiently without dependable electricity.
A university cannot operate modern laboratories without it.
Electricity is therefore not merely an infrastructure issue.
IT IS AN ECONOMIC PRODUCTION ISSUE.
The power sector must be reformed with one overriding objective:
RELIABLE AND AFFORDABLE ELECTRICITY FOR PRODUCTION.
Government should not be ideological about ownership.
Where private capital can deliver, let private capital deliver.
Where government intervention is necessary, government should intervene.
Where existing institutional arrangements are failing, they must be redesigned.
What matters is not whether electricity is produced by the public sector or the private sector.
What matters is whether Nigerians actually have electricity.
SECOND: AGRICULTURE MUST BECOME A NATIONAL ECONOMIC PRIORITY
Food inflation is not simply an inflation problem.
It is fundamentally a production problem.
Nigeria has enormous agricultural potential.
But farmers cannot produce efficiently when they face insecurity, poor roads, expensive fertiliser, inadequate irrigation, expensive transportation, limited storage and weak access to credit.
The farmer must be treated as an economic producer—not merely as a beneficiary of government programmes.
We need:
• security for farming communities;
• irrigation;
• improved seeds;
• affordable fertiliser;
• mechanisation;
• rural roads;
• storage facilities;
• processing plants;
• agricultural credit;
• crop insurance;
• reliable markets.
And agriculture must be connected to industry.
The farmer should produce for the factory.
The factory should process the farmer’s output.
The processed product should supply the Nigerian market and, where possible, the export market.
That is how agriculture becomes an engine of industrialisation.
THIRD: RESCUE THE NIGERIAN MIDDLE CLASS
One of the greatest casualties of the present crisis is the Nigerian middle class.
Nigeria cannot build a stable democracy on a society consisting of a very small group of extremely wealthy citizens and a vast population struggling with poverty.
The middle class is economically and politically important.
Teachers.
Lawyers.
Doctors.
Engineers.
Civil servants.
Academics.
Small business owners.
Professionals.
Young entrepreneurs.
Technicians.
Managers.
These are the people who sustain a functioning economy.
If their purchasing power collapses, the economy loses one of its most important stabilising forces.
Government must therefore pay greater attention to:
REAL WAGES.
Not merely nominal salaries.
The question is not:
“How much does a worker earn?”
The question is:
“What can that income actually buy?”
FOURTH: SUPPORT MSMEs
Nigeria’s small and medium-sized enterprises are not a marginal part of the economy.
They are one of the country’s principal sources of employment and entrepreneurship.
But an entrepreneur cannot grow when electricity is expensive, credit is inaccessible, taxation is unpredictable and foreign exchange is unstable.
Government should therefore develop a coordinated MSME policy built around:
POWER + CREDIT + SKILLS + MARKETS + TAX SIMPLICITY + SECURITY.
Giving a business owner a loan without solving electricity and infrastructure problems may simply create another debt burden.
We must address the whole production environment.
FIFTH: MAKE TAX REFORM PRODUCTION-FRIENDLY
Nigeria needs more revenue.
There is no serious argument against that proposition.
Government cannot provide modern infrastructure, security, education, healthcare and social protection without adequate revenue.
But taxation must not kill production.
The principle should be simple:
TAX CONSUMPTION AND RENT-SEEKING MORE INTELLIGENTLY; DO NOT PUNISH PRODUCTION INTO EXTINCTION.
A growing business should see taxation as a predictable obligation—not as a succession of surprises from federal, state and local authorities.
Tax administration should therefore be simple, transparent and predictable.
SIXTH: USE THE ADDITIONAL REVENUE WELL
Higher government revenue is not itself an achievement if the money disappears into recurrent expenditure, waste, corruption or politically motivated projects.
The World Bank’s latest assessment is particularly important here.
It reports that higher revenues have strengthened state finances and created opportunities for greater spending on infrastructure and services—but stresses that spending efficiency, accountability and service delivery will determine whether Nigerians actually benefit.
This is the heart of the matter.
REVENUE IS NOT DEVELOPMENT.
Revenue is merely the resource with which development can be purchased.
Development occurs when the revenue is converted into:
• roads;
• electricity;
• water;
• schools;
• hospitals;
• security;
• productive infrastructure;
• jobs;
• human capital.
SEVENTH: SOCIAL PROTECTION MUST BECOME A SERIOUS POLICY
No responsible government should tell millions of people:
“Endure the pain today; prosperity is coming tomorrow.”
That is not sufficient economic policy.
If reforms create short-term dislocation, government must provide targeted protection.
The IMF itself recommends scaling up and properly budgeting for Nigeria’s cash-transfer system because poverty and food insecurity remain severe.
But social protection must be intelligent.
It should not become a permanent substitute for employment.
The objective should be:
PROTECT PEOPLE TODAY; MAKE THEM PRODUCTIVE TOMORROW.
Cash transfers should therefore be connected where appropriate to education, skills, healthcare, agricultural production, entrepreneurship and employment.
EIGHTH: SECURITY IS ECONOMIC POLICY
We cannot discuss Nigerian economic recovery without discussing insecurity.
A farmer who cannot safely cultivate his farm is an economic statistic waiting to become a food shortage.
A business owner whose premises can be attacked cannot invest confidently.
A transporter operating on insecure roads must charge more.
A community displaced by violence loses productive capacity.
The IMF explicitly notes that insecurity is affecting investment, agriculture and oil production.
Therefore:
SECURITY POLICY IS ECONOMIC POLICY.
Every naira spent on effective security that enables citizens to produce safely should be understood partly as an economic investment.
NINTH: STOP CELEBRATING PORTFOLIO MONEY AS THOUGH IT WERE FACTORIES
Nigeria needs foreign capital.
But we must distinguish between different kinds of foreign capital.
A portfolio investor can enter and leave quickly.
A factory is different.
A mining operation is different.
An agro-processing plant is different.
A technology company employing thousands of Nigerians is different.
Infrastructure investment is different.
Nigeria therefore needs to compete aggressively for productive and long-term investment.
The question should not merely be:
“How many dollars entered Nigeria?”
The better questions are:
HOW MUCH PRODUCTIVE CAPACITY DID THOSE DOLLARS CREATE?
HOW MANY JOBS DID THEY CREATE?
HOW MUCH DID THEY ADD TO EXPORTS?
HOW MUCH TECHNOLOGY DID THEY TRANSFER?
HOW MUCH DID THEY EXPAND DOMESTIC PRODUCTION?
That is the investment Nigeria needs.
TENTH: THE GOVERNMENT MUST RESIST THE TEMPTATION TO DECLARE VICTORY TOO EARLY
This is perhaps the most important political point.
The government has legitimate reasons to point to improved economic indicators.
But it should not confuse improvement with completion.
Nigeria has not arrived.
The World Bank’s latest assessment is remarkably balanced: it says the reforms have improved growth, public finances and the external position, but insists that the benefits must now be widely shared through better services, infrastructure, human capital and job creation.
That is precisely where the administration should concentrate its political energy.
SO, ARE THE REFORMS WORKING?
My answer is:
YES—AT THE LEVEL OF MACROECONOMIC STABILISATION.
But:
NOT YET SUFFICIENTLY AT THE LEVEL OF HOUSEHOLD PROSPERITY.
Both statements can be true simultaneously.
The IMF says the reforms have strengthened macroeconomic stability and resilience.
The World Bank says the economy is growing and fiscal and external conditions have improved, while poverty remains high and household incomes have not fully recovered.
There is therefore no intellectual contradiction.
The first phase is producing results.
The second phase must now begin in earnest.
FROM STABILISATION TO TRANSFORMATION
Nigeria should not abandon the reforms simply because they have been painful.
But neither should government hide behind the reforms to avoid confronting their social consequences.
The reforms should be refined.
The productive economy should be strengthened.
Social protection should be expanded and better targeted.
Electricity should become a national emergency.
Agriculture should become commercially productive.
MSMEs should be supported.
Security should be improved.
Taxation should encourage rather than suffocate production.
Government expenditure should be disciplined.
Corruption should be attacked relentlessly.
And additional government revenue must be converted into visible public goods.
That is how we move from reform to recovery.
And from recovery to prosperity.
THE ROAD AHEAD
Nigeria is not doomed.
Neither is Nigeria magically cured.
We are somewhere in between.
The country has undertaken difficult reforms that have begun to correct some of the distortions that accumulated over decades.
But the cost has been severe.
Millions of Nigerians have lost purchasing power.
Poverty remains extremely high.
Food insecurity remains serious.
The middle class has been squeezed.
Young Nigerians continue to search desperately for opportunities.
Businesses struggle with energy and credit costs.
And insecurity continues to damage productive capacity.
These realities must not be denied.
But neither should the measurable progress in macroeconomic stabilisation be denied.
The sensible position is therefore neither:
“Everything is wonderful.”
Nor:
“Everything is a disaster.”
The sensible position is:
THE REFORMS HAVE BEGUN TO REPAIR THE MACROECONOMY. NOW THEY MUST BE MADE TO REPAIR THE LIVES OF THE PEOPLE.
That is the real test.
Nigeria does not merely need a balanced government balance sheet.
Nigeria needs a productive economy.
Nigeria does not merely need GDP growth.
Nigeria needs inclusive growth.
Nigeria does not merely need foreign reserves.
Nigeria needs productive capacity.
Nigeria does not merely need higher government revenue.
Nigeria needs better government spending.
Nigeria does not merely need lower inflation.
Nigeria needs rising real incomes.
Nigeria does not merely need investors.
Nigeria needs factories, farms, technology, infrastructure and jobs.
And Nigeria does not need a government that merely tells citizens to be patient.
It needs a government that can demonstrate, step by step, how today’s sacrifices are being converted into tomorrow’s prosperity.
That is the social contract.
That is the second half of the reform.