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From subsidy removal and FX reforms to stronger revenues, higher oil output and deeper refining capacity, Nigeria’s economic managers say the country is moving from survival mode to recovery, but households are still waiting for the gains to fully reach their pockets.
Analysts say that Nigeria’s economy is gradually emerging from one of its most difficult periods of adjustment in recent history, with the Federal Government saying reforms introduced since May 2023 have moved the country away from acute macroeconomic distress and towards greater stability and resilience.
In his assessment, the Executive Chairman of the Nigeria Revenue Service (NRS), Dr. Zacch Adedeji, said the reforms were beginning to deliver measurable results across government revenue, oil production, foreign exchange, investment, corporate performance and the financial system.
Speaking on Channels Television’s Sunday Politics, Adedeji identified the removal of petrol subsidy, the unification of the foreign exchange market, implementation of the Petroleum Industry Act (PIA), tighter monetary policy and the ongoing tax overhaul as some of the major measures reshaping the economy.
According to him, the reforms introduced by President Bola Tinubu’s administration in May 2023 initially created significant economic pain but were necessary to correct long-standing structural weaknesses.
He said the economy was now showing “strong signs of full recovery and accelerated growth” following the difficult adjustments triggered by the reforms.
Adedeji said improvements in exchange rate stability, moderating inflationary pressures and better liquidity conditions were already strengthening business confidence and allowing companies and investors to make longer-term decisions with greater certainty.
“Nigeria’s economy is showing strong signs of full recovery and accelerated growth following a series of necessary reforms by the current administration.
“The economy has moved decisively from acute macroeconomic distress to a more stable and increasingly resilient footing.
“This is as a result of President Bola Tinubu’s economic management acumen and doggedness in implementing his reforms as part of his Renewed Hope Agenda for the country,” he said.
Four major distortions inherited
The NRS assessment was contained in a report titled, “National Economic Performance: Baseline (May 29, 2023) vs Current Outlook (Mid-June 2026): A Comparative Review of President Bola Ahmed Tinubu Administration’s Economic Reform Programme.”
The report said the administration inherited four mutually reinforcing distortions when it assumed office in May 2023.
These were an unsustainable fuel subsidy regime, a fragmented and opaque foreign exchange market, an oil sector producing substantially below capacity and a tax base that was far below its potential.
The NRS described the removal of the fuel subsidy and the unification of the foreign exchange market within days of Tinubu’s assumption of office as the two foundational adjustments from which several subsequent developments could be traced.
The subsidy regime had placed a huge burden on government finances, while the multiple exchange-rate system created opportunities for arbitrage and round-tripping.
According to the NRS, subsidy removal freed federally collectible revenue that had previously been consumed by fuel under-recovery, while FX unification helped restore price discovery and credibility to the currency market.
The reforms, however, came at a heavy cost.
The removal of petrol subsidy immediately increased transport and living costs, while the naira weakened sharply after the FX reforms. Businesses faced higher operating expenses, households saw their purchasing power decline and inflation accelerated.
For millions of Nigerians, the early phase of the reforms was therefore defined less by economic recovery than by hardship.
The NRS, however, argues that the painful adjustment was necessary to correct structural weaknesses that had accumulated over many years.
Revenue begins to tell the story
Perhaps the clearest evidence of the changing economic landscape is the performance of tax revenue.
According to the NRS, tax collections rose from N12.3 trillion in 2023 to N21 trillion in 2024 and N28.3 trillion in 2025.
In the first eight months of 2026 alone, total collections stood at N27.1 trillion.
The improvement has also pushed Nigeria’s tax-to-GDP ratio to 13 per cent, from 10.3 per cent in 2023.
Although the figure remains below the government’s 18 per cent target, the NRS believes there is significant room to expand the tax base without necessarily increasing the burden on compliant taxpayers.
The revenue service attributed the improvement to digitalisation of tax administration, expansion of the tax base and the implementation of a new tax framework.
One of the major initiatives is the national e-invoicing system for large taxpayers, which is expected to improve transparency and reduce leakages in the tax system.
Four new laws that came into effect on January 1, 2026 are also expected to reshape the revenue system.
They are the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Establishment Act and Joint Tax Board Establishment Act.
The transformation of the former Federal Inland Revenue Service into the Nigeria Revenue Service is also significant.
The NRS said the new structure would strengthen revenue consolidation by bringing together non-tax revenue streams that were previously collected by different government agencies.
Non-oil sources now account for 76 per cent of total collections, according to the service, a development it described as a major step towards reducing the country’s dependence on crude oil revenue.
The agency expects revenue mobilisation to improve further as e-invoicing expands and the new tax laws become fully operational in 2026 and 2027.
Oil sector stages a comeback
The oil and gas industry, which had struggled with theft, pipeline vandalism, underinvestment and regulatory uncertainty, has also shown signs of recovery.
The NRS said crude oil production had risen to about 1.73 million barrels per day by August 2026, equivalent to about 104 per cent of Nigeria’s OPEC quota.
That represents a significant improvement from the estimated 1.2 million to 1.3 million barrels per day recorded around the beginning of the reform period.
The recovery, according to the service, has been supported by intensified security operations against pipeline vandalism and crude theft, as well as continued implementation of the Petroleum Industry Act.
The PIA was designed to provide a clearer fiscal and regulatory framework for the petroleum industry and attract fresh investment into the sector.
The NRS acknowledged that crude output had fluctuated during the recovery period but maintained that the overall trend remained positive after years of production losses.
The improvement in crude production is particularly important for Nigeria because higher output translates into greater export earnings and potentially stronger government revenue.
But perhaps the more dramatic transformation is taking place downstream.
Refining capacity changes the equation
Nigeria’s domestic refining capacity has expanded sharply since 2023.
According to the NRS, capacity increased from about 30,000 barrels per day in May 2023 to approximately 700,000 barrels per day by mid-2026.
About 90 per cent of domestic petrol supply is now being met through local refining, while diesel imports fell to zero by May 2026.
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The development has been driven largely by increased private-sector investment, with the Dangote Refinery playing a central role in the transition.
The emergence of large-scale domestic refining capacity represents a major shift for an economy that had for decades depended heavily on imported petroleum products despite being one of Africa’s major crude oil producers.
Fuel imports had required significant foreign exchange, thereby adding pressure to the currency market.
The NRS said the crude-for-naira arrangement between the Nigerian National Petroleum Company Limited and Dangote Refinery had also helped reduce dollar demand associated with fuel imports.
This, it said, had eased some pressure on the foreign exchange market.
The broader lesson, according to the revenue service, is that policy certainty can encourage private capital to finance projects that the government alone may not be able to undertake.
Major upstream transactions involving Seplat Energy and Aradel Holdings were also cited as developments capable of strengthening Nigeria’s long-term oil and gas prospects by expanding reserves and production capacity.
Debt picture improves, but pressure remains
Nigeria’s debt position has also become a key part of the economic recovery narrative.
The NRS said the country’s debt-to-GDP ratio declined from 35.5 per cent in 2025 to 32.3 per cent in 2026.
It attributed the decline largely to nominal GDP growth outpacing debt accumulation and noted that the ratio remained below the International Monetary Fund’s 55 per cent risk threshold.
The service, however, explained that the rise in the naira value of the country’s debt stock was largely influenced by the revaluation of dollar-denominated obligations following exchange-rate movements rather than fresh borrowing.
The improvement in investor confidence has also been reflected in Nigeria’s access to international capital markets.
The NRS cited the oversubscription of Nigeria’s November 2025 Eurobond by 12 times, alongside a record order book, as evidence that international investors were increasingly pricing Nigerian risk more favourably.
Yet, the agency acknowledged that debt-service-to-revenue remains a major concern.
For Nigeria, the challenge is not simply how much it owes but how much of its revenue must be committed to servicing that debt.
The NRS, therefore, argued that stronger domestic revenue mobilisation remains the most sustainable route to reducing debt-service pressure and creating fiscal space for infrastructure and other capital expenditure.
Banks positioned to finance growth
The banking sector is another area where the government expects reforms to support economic expansion.
The recapitalisation of banks has strengthened the capital base of financial institutions and is expected to improve their capacity to finance large corporate projects.
Stronger banks, the NRS argued, should be better positioned to provide businesses with long-term financing for expansion, infrastructure, manufacturing and export-oriented activities.
This is important because access to affordable and long-term capital remains one of the biggest challenges facing Nigerian businesses.
The NRS said the combined effect of monetary, fiscal, tax and structural reforms had created a more predictable operating environment for capital-intensive and export-focused companies.
“These reforms have improved the overall business climate and reduced structural inefficiencies as well as enhanced the operating environment for capital intensive and export-oriented firms by improving market efficiency, strengthening macroeconomic stability, increasing investor confidence,” Adedeji said.
He added that the reforms had translated into measurable improvements in corporate financial performance through stronger market fundamentals and a more predictable business environment.
“The resulting improvements in operational efficiency, financial transparency, and investment planning provide a clear economic explanation for the substantial increases in both revenue and earnings before tax recorded by many of the companies in this dataset,” he said.
From adjustment to consolidation
The government’s argument is essentially that Nigeria has passed through the most difficult stage of its economic restructuring and is now entering a period in which the focus should shift from adjustment to consolidation.
That does not mean the challenges have disappeared.
Inflation, high living costs, weak household purchasing power, unemployment, high borrowing costs and pressure on businesses remain significant concerns.
The gains highlighted by the NRS also need to translate into improvements that ordinary Nigerians can see and feel in their daily lives.
Higher government revenue, for instance, will have greater meaning if it leads to better infrastructure, improved public services, stronger social protection and a more productive economy.
Similarly, higher crude production and increased refining capacity will need to result in greater economic opportunities, more stable energy prices and stronger industrial output.
The NRS itself acknowledged that the reform process had come with considerable pain for businesses and households.
Nevertheless, it maintained that the economic fundamentals were now stronger than they were at the beginning of the Tinubu administration.
“Taken together, these reforms have enhanced the operating environment for capital intensive and export-oriented firms by improving market efficiency, strengthening macroeconomic stability, increasing investor confidence, and facilitating more efficient allocation of capital,” the service stated.
The agency said the country had moved from a period of acute macroeconomic distress to a more stable and resilient footing when measured against its May 2023 starting point.
The next challenge, therefore, is no longer simply implementing reforms. It is making the gains durable.
Turning recovery into prosperity
For the government, the numbers suggest that Nigeria is beginning to turn the corner.
Revenue is rising, oil production has recovered, domestic refining has expanded, the tax base is widening, banks are becoming better capitalised and investors appear more willing to commit funds to the Nigerian market.
But economic recovery will ultimately be judged beyond government balance sheets and corporate earnings.
It will be judged by whether businesses can produce more at lower costs, whether workers can earn more, whether families can afford basic necessities and whether investors can plan with confidence.
The NRS said the next phase would require consolidating the gains already recorded, sustaining revenue growth, improving debt-service capacity and ensuring that macroeconomic stability translates into durable improvements in investment, production and living standards.
That is arguably the most important phase of the reform journey.
Nigeria may have moved beyond the immediate crisis that confronted the economy in 2023, but the harder task of turning macroeconomic stability into broad-based prosperity has only begun.
The reforms may have stopped the bleeding. The success of the next phase will depend on whether they can now deliver stronger growth, more jobs, greater productivity and tangible improvements in the lives of Nigerians.
