The Federal Ministry of Finance deserves credit for bringing Nigeria’s economic reforms into the public domain through its “Nigeria’s Economic Reforms: By the Numbers” platform. The initiative addresses an important question: where did the money come from, where did it go, what has changed since 2023, and what do those changes mean? This is a welcome move towards evidence-based fiscal communication and public accountability. But because the Ministry has put the numbers at the centre of the reform narrative, those numbers should be subjected to equally rigorous scrutiny.
The government’s scorecard tells Nigerians what changed. It does not yet tell us what would have happened without the reforms, what changed because of them, who paid the price, who benefited, or whether the benefits ultimately exceed the costs. That distinction matters. A before-and-after comparison can show that something changed; it cannot, by itself, establish that the reform caused the change, that Nigerians are better off as a result, or that no better policy alternative existed.
The Ministry has made a persuasive case that Nigeria’s fiscal and macroeconomic position has changed substantially since 2023. What remains less clear is how much of that change can be attributed to the reforms themselves, how the costs have been distributed, whether the resources released have been deployed efficiently, and whether macroeconomic stabilisation is translating into higher productivity, better public services, and improved living standards.
That is not an argument against reform. It is an argument for taking reform seriously enough to evaluate it properly. The strongest defence of reform is not that every number moved in the right direction. It is that the reforms can withstand questions of attribution, counterfactuals, distribution and welfare.
What did subsidy removal actually save?
One of the Ministry’s most useful clarifications concerns the widely cited ₦15.8 trillion in estimated subsidy savings between June 2023 and December 2025. The ₦15.8 trillion did not sit in the Federal Government’s coffers. The estimated additional resources were distributed through the Federation Account, with approximately ₦5.43 trillion going to the Federal Government, ₦6.52 trillion to states and ₦3.88 trillion to local governments. This is an important clarification. It corrects the impression that the Federal Government personally “saved” the entire ₦15.8 trillion and could therefore have spent the whole amount on roads, hospitals, schools or social protection.
Nigeria’s federal fiscal architecture matters. A significant portion of the additional resources generated through the reform accrued to subnational governments. The next question, therefore, is not simply how much was generated, but what happened to those resources after distribution.
The Ministry further estimates that the Federal Government’s ₦5.43 trillion share of subsidy savings was supplemented by ₦3.12 trillion in other incremental revenues and ₦11.85 trillion in additional borrowing, producing approximately ₦20.40 trillion in incremental Federal Government resources.
The arithmetic is clear, but the terminology matters. Borrowing is a financing resource, not revenue. It provides money today in exchange for a future liability. Of the ₦20.4 trillion, therefore, only ₦8.55 trillion represents the Federal Government’s share of estimated subsidy savings and other incremental revenues. ₦11.85 trillion represents additional borrowing. This distinction is important because subsidy reform did not create a ₦20.4 trillion cash surplus. A more precise description is that the reforms generated some additional fiscal resources and enabled the government to mobilise additional financing.
Indeed, the Ministry itself makes the more defensible argument that subsidy removal reduced the borrowing that would otherwise have been required. That is different from saying that it eliminated the need to borrow.
The counterfactual matters
The next question is how robust the ₦15.8 trillion estimate actually is. The Ministry compares post-removal Federation Account receipts with what would have been received if the pre-removal monthly run-rate had continued. That is a legitimate accounting baseline. But it is not necessarily a pure measure of savings caused exclusively by subsidy removal.
Federation Account revenues are influenced by oil prices, crude production, exchange rates, VAT, company income tax, customs collections, inflation, economic activity and other reforms. The Ministry itself acknowledges that broader revenue gains reflect concurrent fiscal and foreign-exchange reforms. The additional receipts should therefore be described cautiously as resources above a selected baseline rather than automatically as the precise economic value of subsidy savings attributable to one reform.
This is where the counterfactual should become central. What would Nigeria have looked like without reform? Would inflation have been higher? Would reserves have been weaker? Would deficits and borrowing have been larger? Would the exchange-rate crisis have been more severe?
Probably. But the harder questions are equally legitimate. Would poverty have risen as rapidly? Would real household incomes have fallen as sharply? Would transport and food costs have increased as much? Would a phased subsidy removal accompanied by stronger social protection have produced a different distribution of costs and benefits?
These questions do not deny the necessity of reform. They test whether the particular reform path chosen was the least costly and most welfare-enhancing option.
A serious counterfactual should therefore compare at least four scenarios: continuation of the subsidy, gradual removal, immediate removal with weak safety nets, and immediate removal accompanied by substantially stronger targeted social protection. The comparison should examine inflation, household income, transport and production costs, poverty, employment, growth, debt, exchange rates and public finances under each scenario.
The Ministry’s underlying fiscal analysis reportedly considers baseline, current and no-reform scenarios. That is encouraging. But the assumptions behind those scenarios should be made sufficiently transparent for independent analysts to test them.
Correlation is not causation
The same discipline should apply to the broader reform scorecard. Correlation tells us that two things moved together. Attribution asks how much of the movement can reasonably be associated with an intervention. Causation requires stronger evidence that the intervention produced the outcome after accounting for other forces.
Nigeria’s reform period coincided with major movements in oil prices, crude production, exchange rates, monetary policy, inflation, tax administration, capital flows, global financial conditions and economic activity. A credible scorecard should therefore show not only what changed after 2023, but how much of the change can reasonably be attributed to the reforms. That distinction is particularly important because a fiscal saving is not automatically a welfare gain.
Removing the petrol subsidy may reduce government expenditure while simultaneously increasing transport, logistics, food distribution and production costs. Households may lose purchasing power even as government finances improve. Therefore, ₦15.8 trillion in estimated fiscal savings cannot simply be presented as ₦15.8 trillion in national welfare gains.
The proper welfare analysis must consider the fiscal benefit, efficiency gains, household and business costs, who bears those costs, and the long-term benefits expected from redeploying the resources. That is the bridge between fiscal accounting and economic welfare.
Who paid for reform?
A reform can be fiscally efficient and still be socially regressive in the short run. Urban and rural households, wage earners, informal workers, farmers, manufacturers, transport users, import-dependent businesses and asset owners do not experience the same adjustment costs. The central question is therefore not only whether the economy gained in aggregate, but who gained, who lost and by how much.
This is especially important because the Ministry itself identifies serious distortions that reform was intended to correct. It argues that the petrol subsidy had become fiscally unsustainable, with the projected 2023 full-year cost of approximately ₦6.7 trillion, equivalent to about 70 percent of actual Federal Government revenue. It also points to smuggling and the disproportionate benefits accruing to wealthier households. On foreign exchange, the Ministry identifies distortions arising from multiple exchange-rate windows, including arbitrage and preferential access to foreign currency.
These were genuine problems.
The IMF’s 2026 Article IV assessment broadly supports the reform direction, concluding that ending fuel subsidies, reducing deficit monetisation, tightening monetary policy and liberalising the exchange rate strengthened macroeconomic stability, reduced fiscal vulnerabilities, rebuilt external buffers and improved foreign-exchange market functioning.
The question is therefore no longer simply whether reform was necessary. It is whether it was implemented and sequenced in a way that minimised avoidable social costs. A necessary reform can still be poorly sequenced. The existence of a fiscal problem does not make every implementation strategy optimal.
Stabilisation is not welfare
The Ministry identifies approximately ₦423.8 billion in incremental initiatives under social welfare, including ₦223.8 billion for NELFUND, ₦150 billion for the MOFI Real Estate Investment Fund and ₦50 billion for CREDICORP. These programmes may have significant developmental value. But they should not automatically be treated as equivalent to direct social protection.
A student loan is not a cash transfer to a poor household. Consumer credit is not emergency income support. Mortgage finance is not food assistance. These programmes address opportunity and financing constraints. They do not necessarily compensate households for the immediate welfare shock associated with higher food, transport and living costs. This distinction matters because the country has been experiencing severe poverty and food insecurity.
The IMF estimates that poverty reached 63 percent in 2025 and that about 27 million Nigerians faced food insecurity in the autumn of that year. It has consequently called for adequately funded cash transfers and stronger social protection. Nigeria can therefore experience genuine macroeconomic stabilisation while millions of Nigerians remain under severe welfare pressure. There is no contradiction.
Stabilisation and welfare are different tests. The reform programme must ultimately demonstrate that stabilisation is translating into recovering household purchasing power, employment, food security and living standards.
Where did the money go?
The Ministry reports ₦30.64 trillion in incremental expenditure pressures, including ₦9.39 trillion in wage adjustments, ₦9.37 trillion from the exchange-rate impact on external debt service, ₦6.47 trillion in strategic infrastructure and ₦3.14 trillion in electricity subsidy support. These figures are useful, but they raise another methodological question: what exactly is “incremental expenditure”?
Is it expenditure above a nominal pre-reform baseline? An inflation-adjusted baseline? What would have occurred without reform? Or simply additional cash obligations recorded during the period? In an economy experiencing substantial inflation and exchange-rate depreciation, those distinctions matter. Some expenditure increases may represent genuine expansion of public services. Others may simply reflect higher prices, higher wages or exchange-rate valuation effects.
A stronger fiscal scorecard should therefore distinguish real additional expenditure from inflationary effects, foreign-exchange valuation effects and genuinely new programmes. But the bigger question is not simply where the money went. It is what the money achieved.
If ₦1 trillion is spent on infrastructure, what economic return is expected? If ₦1 trillion is spent on wages, what additional quantity or quality of public service should citizens receive? If ₦1 trillion is borrowed, what future revenue or productivity gain will service the liability? These are questions of allocative efficiency and value for money.
From expenditure to public value
The ₦6.47 trillion reported for strategic infrastructure illustrates the point. Infrastructure is essential to Nigeria’s transformation. But expenditure is an input, not an outcome.
A road is not an economic benefit merely because government has paid a contractor. The relevant questions are whether the road was completed, whether it reduced travel time and logistics costs, whether it connected producers to markets, increased investment and generated economic activity.
The same applies to housing, agriculture, security and other capital projects. Nigeria’s problem has never been simply inadequate public expenditure. It has also been the weak conversion of expenditure into completed, productive and sustainable public assets.
The proper chain is therefore: resources → institutions → expenditure → outputs → outcomes → welfare. The gap between expenditure and welfare is where public financial management, procurement, project appraisal, contract management and institutional accountability become decisive. This is why the IMF’s call for improvements in budgeting, fiscal reporting, transparency, accountability and public financial management is so important. More revenue without better expenditure management can simply create a larger pool of money to misallocate.
The debt problem is also a revenue problem
The ₦9.37 trillion exchange-rate impact on external debt service highlights another structural weakness. Nigeria’s fiscal problem is not simply that it has borrowed too much. Exchange-rate depreciation increases the naira cost of servicing foreign-currency debt already accumulated.
The Ministry therefore deserves credit for focusing attention on debt service relative to revenue rather than debt-to-GDP alone. At roughly 36 percent of GDP, Nigeria’s public debt is not extraordinarily high by international standards. But debt service consumes an exceptionally large share of government revenue.
The Ministry estimates that debt service will absorb more than 40 percent of projected Federal Government revenue in 2026, with ₦15.8 trillion in debt service against projected revenue of ₦36.87 trillion. The IMF similarly highlights exceptionally high interest costs relative to revenue.
This suggests that Nigeria’s central fiscal challenge is as much a revenue problem as a debt problem.
A country can have a moderate debt-to-GDP ratio and still face severe fiscal stress if revenue mobilisation is too weak to finance debt service and essential public services. The relevant question is therefore not simply, “Is Nigeria’s debt ratio safe?” It is: how much fiscal space remains after debt service and other unavoidable obligations are paid? That is why sustained revenue mobilisation remains essential. But higher revenue must be matched by better expenditure quality.
Governance determines whether reform becomes development
This brings public financial management and governance to the centre of the reform agenda. The BTI’s Nigeria Country Report 2026 cited in this assessment places Nigeria’s Status Index at 3.99, ranking the country 104th of 137 countries, while its Governance Index stands at 4.44, ranking 78th. The significance of these figures is not the league-table ranking itself. It is what they suggest about the institutional environment within which economic reforms must operate.
Fiscal capacity does not automatically create development capacity. What happens when government succeeds in raising resources faster than it strengthens the institutions responsible for spending them? The uncomfortable answer is that more money can enlarge both the opportunity for productive investment and the opportunity for waste, leakage, weak procurement and politically driven allocation.
Fiscal reform and institutional reform must therefore advance together. The same principle applies to states and local governments. If they received substantial additional Federation Account resources, Nigerians should be able to trace what happened next.
How much went into salaries and pensions? How much went into roads, health, education and water? How much cleared arrears? How many projects were completed? Did service delivery improve?
The fiscal incidence of reform is only the first stage. What matters ultimately is the development incidence.
Reserves, capital inflows and the exchange-rate reform
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The foreign-exchange reform presents a stronger case for macroeconomic improvement. The Ministry argues that exchange-rate unification eliminated distortions, reduced arbitrage and improved market transparency. The IMF broadly agrees, finding that exchange-rate liberalisation contributed to improved FX-market functioning and external resilience. The recovery in reserves is therefore significant. But reserve figures should always be presented with their date and methodology.
The Ministry cites gross reserves above US$52 billion, while the IMF’s end-2025 estimate under its own definition was approximately US$46 billion and notes that its measure is around US$8 billion below the Central Bank’s official gross-reserve measure. These figures may reflect differences in timing and methodology. The lesson is simple: government communications should make those differences explicit.
More importantly, reserves are a means, not an end. The ultimate objective should be an economy capable of generating foreign exchange sustainably through exports, investment and productivity. The success of FX reform should therefore be judged not merely by reserve accumulation, but by whether Nigeria expands non-oil exports, attracts productive foreign investment, increases domestic production and reduces structural dependence on imports.
The Ministry’s reported US$10.37 billion in capital importation in the first quarter of 2026, including more than US$4 billion in FDI, is encouraging. But composition matters. Portfolio capital can move quickly in response to interest rates and investor sentiment. Productive FDI depends more heavily on infrastructure, security, contract enforcement, policy stability and long-term confidence.
The real question is therefore not simply whether capital is entering Nigeria, but whether it is financing productive capacity, creating jobs, expanding exports and increasing domestic value added.
Growth: recovery or transformation?
The Ministry reports real GDP growth of 3.89 percent in the first quarter of 2026. The IMF estimates growth of around 4 percent in 2025 and projects 4.1 percent for 2026. This suggests recovery and improved macroeconomic stability. But it does not yet demonstrate transformation.
For a country with a rapidly growing population and large deficits in infrastructure, employment and human capital, aggregate GDP growth is not enough. The more relevant indicators are real GDP per capita, productivity, employment, real household income and poverty.
An economy can grow at four percent while many households remain poorer in real terms. This is particularly important given the IMF’s nominal GDP-per-capita estimates. Nigeria’s nominal GDP per capita was approximately US$2,139 in 2023, before the major petroleum subsidy reform, but is projected at about US$1,556 in 2026, following US$1,084 in 2024 and US$1,223 in 2025.
Much of this movement reflects exchange-rate depreciation rather than a collapse in real domestic output. Nominal dollar GDP per capita is therefore not a direct measure of household welfare. But the movement is still important. It shows that real domestic GDP growth and Nigeria’s international purchasing power per person can move in very different directions.
Nigeria should therefore track real GDP per capita alongside nominal dollar GDP per capita, real household income, employment, productivity and poverty. The harder question is: when will the reform programme begin to restore sustained gains in the economic capacity of the average Nigerian?
The US$1 trillion question
The Ministry’s ambition of a US$1 trillion economy by 2030 is understandable. Ambitious targets can discipline policy. But nominal GDP measured in US dollars is heavily influenced by exchange rates and inflation. A country can increase dollar GDP without achieving a proportionate increase in productive capacity or household welfare. Conversely, exchange-rate depreciation can reduce dollar GDP even while real domestic output grows.
The US$1 trillion ambition should therefore remain subordinate to more meaningful development indicators: productivity, real GDP per capita, employment, exports, investment, human capital and poverty reduction. This is particularly important because Nigeria entered the reform period after years of weak per-capita performance. The IMF estimates that real GDP per capita declined by an average of 0.7 percent annually between 2014 and 2023.
The country was therefore not beginning reform from a position of broad prosperity. Success must ultimately mean more than stopping deterioration. It must mean creating sustained growth in productivity, real incomes and economic opportunity faster than population growth. The Ministry itself identifies the right long-term tests: growth above seven percent, formal employment, diversified exports and falling poverty. Those are far more meaningful measures of transformation than a nominal GDP milestone.
Three scorecards, not one
Nigeria now needs three interconnected reform scorecards. The first is the macroeconomic scorecard: subsidy savings, revenues, borrowing, reserves, inflation, GDP growth, capital expenditure, debt service and capital inflows. Its question is: has Nigeria become more fiscally and economically stable? On several important measures, the evidence suggests that it has.
The second is the economic transformation scorecard: real GDP per capita, productivity, private investment, exports, electricity reliability, manufacturing, infrastructure utilisation and job creation. Its question is: has stabilisation produced a more productive economy? The evidence is still emerging.
The third is the citizen welfare scorecard: real household income, food affordability, poverty, food insecurity, employment and underemployment, health, education, transport affordability and social-protection coverage. Its question is the most important: are Nigerians materially better off? The three should never be conflated.
A government can improve its fiscal position without improving household welfare. GDP can grow without generating enough productive employment. Reserves can rise while firms struggle with electricity and infrastructure. Capital inflows can increase without transforming productive capacity.
The purpose of the scorecard is therefore to show the transmission mechanism: fiscal stabilisation → investment → productivity → employment → household income → improved welfare. If that chain breaks, government must be able to identify where and why.
The scorecard must measure bad news too
The Ministry’s proposed indicators are a good beginning: inflation, real GDP growth, debt-service-to-revenue, capital-budget execution, reserves, FDI share of inflows, non-oil revenue-to-GDP and monetary poverty.
But the framework should go further. It should include real GDP per capita, employment and underemployment, real household income, food insecurity, social-protection coverage, tax-to-GDP, primary balance, capital-project completion rates, health and education outcomes, electricity reliability, non-oil exports and state-level fiscal performance. Each indicator should have a baseline, target, responsible institution, reporting frequency and independent data source.
And the scorecard must report bad news as faithfully as good news. If inflation rises, show it. If capital-budget execution falls, report it. If poverty does not decline, say so. If FDI stagnates, acknowledge it. If debt service exceeds projections, publish the number. Transparency becomes meaningful only when it includes inconvenient evidence.
The opportunity cost question
Every naira of public money has an alternative use. Every naira spent on debt service cannot simultaneously finance a school, hospital, road or social programme. Every naira spent on an inefficient project is unavailable for a higher-return investment. Every tax incentive is revenue forgone for another public purpose. Every new borrowing commitment creates future obligations. Public finance is therefore not merely about finding money. It is about making choices under scarcity.
The Ministry’s scorecard is strongest when it explains where resources came from and where they went. It should go further by explaining what government chose not to finance, why competing alternatives were rejected and what economic or social returns are expected from major allocations. This is particularly important in evaluating subsidy removal.
The relevant question is not merely whether the subsidy was expensive. It clearly was. The deeper question is whether the resources released are being deployed into uses that generate greater social and economic returns than the subsidy would have generated.
If subsidy removal saves billions but the resources are subsequently lost through weak procurement, incomplete infrastructure, poor project selection or poorly targeted programmes, one distortion has simply been replaced with another. If, however, those resources finance productive infrastructure, reliable electricity, better health and education, agricultural productivity and a competitive private sector, the long-term gains could substantially outweigh the short-term pain.
From stabilisation to transformation
Nigeria is now at a critical transition point. The first phase of reform was largely about stopping deterioration: reducing unsustainable subsidy costs, ending excessive monetary financing, correcting foreign-exchange distortions, restoring external buffers, strengthening fiscal discipline and rebuilding investor confidence.
There is credible evidence that these objectives have been partially achieved. The IMF concludes that reforms over the past three years strengthened macroeconomic stability and resilience. Reserves have improved, the FX market has become more functional, inflation has begun to moderate from earlier peaks, and growth has returned to around four percent. That is important. But stabilisation is not transformation.
The second phase must convert stability into productivity. That means better project preparation, public investment management and procurement; reliable electricity; improved security; stronger human capital; industrialisation; export diversification; digitalisation; private-sector competitiveness; and sustained domestic revenue mobilisation without excessive pressure on households and businesses. It also means stronger state capacity.
Nigeria cannot indefinitely ask citizens to absorb present hardship on the promise of future gains without specifying what those gains are, how they will be measured and when they should become visible. The social contract of reform requires an observable pathway from sacrifice to benefit.
The next test
It is easier to demonstrate that a subsidy was fiscally unsustainable than to demonstrate that its removal has produced better schools, hospitals, roads, jobs and incomes. It is easier to show that reserves have risen than to demonstrate that Nigeria has developed a competitive export economy.
It is easier to report GDP growth of 3.89 percent than to demonstrate that the average Nigerian is becoming materially better off. And it is easier to report ₦6.47 trillion in infrastructure expenditure than to prove that those projects have generated the promised productivity gains.
The public debate should therefore become more demanding without becoming less fair.
The Ministry’s scorecard is not wrong because it highlights improvements. It is incomplete because the same standards of measurement must be applied to costs, distribution, alternatives and outcomes. Government has provided an important first half of the scorecard: where the money came from, where it went and which macroeconomic indicators changed.
The second half must answer: Who paid? Who benefited? What would have happened without reform? What changed because of reform? What alternatives were available? What did government choose not to finance? And what have Nigerians received in return for the adjustment costs?
The Federal Ministry of Finance should therefore be commended for putting the numbers into the public domain. But the next step should be to turn those numbers into a genuinely comprehensive accountability framework.
That means publishing the assumptions behind the subsidy counterfactual, clearly separating savings, revenue and borrowing, adjusting expenditure analysis for inflation and exchange-rate effects, publishing project-level capital expenditure and execution data, tracing additional Federation Account resources into state and local government outcomes, measuring the distributional impact of reforms and regularly assessing welfare outcomes.
The “no-reform” scenario should also be published in sufficient detail for independent analysts to challenge its assumptions. That is how reform accountability should work in a democratic economy: acknowledge progress, interrogate claims, test assumptions, measure distribution and keep asking whether the public return justifies the public cost.
What did Nigerians get for it?
The ultimate measure of the reform programme is not the ₦15.8 trillion in estimated subsidy savings, the ₦20.4 trillion in incremental Federal Government resources, the ₦30.64 trillion in incremental expenditure, the US$52 billion-plus reserve figure, the US$10.37 billion in capital importation or even the ambition of a US$1 trillion economy.
These are important indicators. But they are intermediate indicators. The ultimate test is whether improved macroeconomic stability is being converted into sustained productivity growth, rising real incomes, decent jobs, stronger public services, lower poverty, greater food security and a more competitive productive economy.
The central question is therefore no longer simply: Was subsidy removal necessary? Nor is it merely: How much money did the reform save? The harder questions are: What would have happened without reform? What changed because of reform rather than other economic forces? Who bore the costs? Who captured the benefits? What alternatives were rejected? And when will the measurable gains of stabilisation begin to appear in the incomes, jobs, services and living standards of Nigerians?
These are not anti-government questions. They are the natural next questions after stabilisation.
Nigeria does not merely need more resources. It needs a state capable of converting scarce resources into public value; a private sector capable of converting investment into productivity and jobs; and an economic system in which the benefits of reform eventually reach the households that have borne its costs.
Macroeconomic stability is necessary. Fiscal sustainability is necessary. Stronger reserves are necessary. Revenue mobilisation is necessary. But none is sufficient. The Ministry has opened an important debate by showing Nigerians where the money came from and where it went. The next chapter must answer the more demanding question: What did Nigerians get for it? That is the standard by which reform will ultimately earn not merely fiscal credibility, but public legitimacy.
