REFORM TALKS with Tanimu Yakubu
The counterfactual that must be faced
Any fair judgment of economic reform has to ask what would probably have happened without it. The comparison is not between Nigeria today and an imaginary country in which years of accumulated problems disappeared at no cost. It is between the course now being taken and a continuation of the policies that came before it.
Would keeping the costly fuel subsidy, multiple exchange rates, severe foreign-exchange shortages, deficit monetisation, weak reserves and worsening investor confidence really have produced lower inflation, more investment, stronger public finances and less poverty? The “despite reforms” argument needs that claim to be true, but the evidence it cites does not prove it. The World Bank and IMF instead describe the earlier policy mix as a source of distortion and the later reforms as part of the improvement in macroeconomic conditions.
None of this means reform is painless, well sequenced in every respect or beyond criticism. Removing a subsidy raises prices immediately, while the benefit to public finances may take much longer to show up in services people can see. Exchange-rate reform can raise the naira cost of imports before exporters and investors have time to respond. Higher interest rates can weaken demand before lower inflation restores purchasing power. These costs are real. But they do not show that the old arrangements could have been sustained indefinitely.
Nigeria was not choosing between reform and an easy life. It was choosing between confronting problems that had accumulated for years and allowing them to grow until the eventual correction became even more painful.
Poverty is a structure, not a single price
Nigeria’s poverty cannot be explained by one fuel price, one exchange rate, one tax decision or one monetary policy move. It is rooted in low productivity, weak education and health outcomes, insecurity, rapid population growth, poor agricultural yields, unreliable power and transport, limited access to finance, too few formal jobs and large regional gaps in opportunity.
Macroeconomic reform cannot solve all of these problems by itself. But a government that is losing revenue, rationing foreign exchange and financing deficits in ways that worsen inflation has less room to solve them. Stabilisation does not equal development. It gives development a firmer base from which to proceed.
This is where the reforms must become visible in everyday life. Electricity must allow businesses to produce at lower cost. Roads and rail must move goods to market. Security must allow farmers to return safely to their land. Schools must teach children effectively. Healthcare must stop illness from wiping out household savings. Cash support must reach people who cannot wait for growth to improve their incomes. And jobs must be real, lasting and decently paid.
If these improvements do not follow, then the reforms will not have delivered what Nigerians were entitled to expect from them. But the fact that they have not yet gone far enough is a reason to finish the work, not to restore the distortions the country is trying to leave behind.
Progress must not become propaganda
A defence of reform loses credibility if it talks past the hardship people are living through. Growth of about four per cent is better than before, but it is still too weak to transform living standards rapidly in a country with a fast-growing population. Stronger reserves do not feed a family. A smaller deficit does not raise a worker’s pay. Higher government revenue improves welfare only when it becomes reliable power, roads, schools, hospitals, security, productive investment and effective support for people in distress.
The World Bank’s April 2026 Nigeria Development Update records continuing high inflation and weak living standards even as macroeconomic conditions improve. That is not an argument for reversing reform. It is an argument that the gains have not yet reached households quickly or widely enough.
That leads to two very different policy choices. If the reforms themselves created the poverty crisis, then reversing them would make sense. But if they have corrected major weaknesses while jobs, productivity and household incomes have been too slow to respond, then the answer is to make the reforms work better and faster for people. The material cited by the article points much more strongly to the second conclusion.
The test that reform must now pass
Government should therefore be judged by demanding, practical results. Is improved stability bringing new investment? Is that investment raising output and productivity? Are better jobs being created? Are wages beginning to outrun prices? Is higher public revenue paying for development rather than simply increasing the cost of government? Are the poorest being protected while the economy adjusts? Those are the tests Nigerians have a right to apply.
If, after a reasonable period, investment does not rise, productive capacity does not expand, public spending does not improve, exchange-rate reform does not encourage more domestic and export production, and growth remains too weak to lift real incomes, then criticism of the programme will be deserved.
But that judgment should be based on what the reforms actually produce over time, not on treating poverty inherited from earlier years as though it began with them. Poverty is too serious to be used as a rhetorical shortcut. It deserves a careful account of causes, costs and results.
The improvement in macroeconomic conditions also raises the standard government must meet. As exchange-rate fragmentation, fiscal leakage and inflationary financing are reduced, Nigerians are entitled to ask a harder question: what has government done with the room those changes have created?
What the evidence actually permits us to conclude
Nigeria entered the reform period with widespread poverty and deep economic vulnerability. The reforms brought real short-term costs while correcting serious weaknesses in the economy. Since then, real output, reserves, the foreign-exchange market and aspects of public finance have shown measurable improvement. But those gains have not yet reached enough people through better jobs, higher productivity and stronger real incomes.
The fall in the current-dollar value of GDP does not overturn that conclusion. It reflects, to a substantial extent, the translation of naira output through a much weaker exchange rate. It says something important about Nigeria’s external purchasing power and the foreign-currency value of domestic incomes; it does not establish an equivalent fall in the quantity of goods and services produced.
That is as far as the evidence safely takes us. “Poverty despite reforms” turns an unfinished programme into a final verdict. The continued existence of hardship does not, by itself, explain what caused it. Poverty is one of the strongest reasons reform must succeed; it is not proof that reform was wrong.
Nigeria’s real choice now is not whether to recreate the policies that produced foreign-exchange shortages, fiscal leakage and instability. It is whether the country can turn greater economic stability into more production, more private investment, better jobs, lower inflation, better public services and rising incomes.
The poverty numbers should be read with full seriousness. They warn against complacency and show how much remains to be done. But they do not cancel the improvements already recorded. The task now is to make those improvements reach the household, the workplace, the farm and the market.
