By Kayode Oladipupo
Nigeria may finally be winning the battle against economic instability. The danger now is assuming that winning the battle is the same as winning the war.
The numbers are encouraging. Growth is strengthening, inflation has fallen dramatically from its peak, the naira market is more functional, and foreign reserves have been rebuilt. The IMF estimates real GDP growth at 4% in 2025 and 4.1% in 2026, while inflation, which averaged 33.2% in 2024, is projected at 16% on an annual-average basis in 2026. Inflation reached 15.4% year-on-year in March before renewed global food and fuel pressures pushed the outlook higher.
Foreign reserves have also strengthened significantly, providing a larger buffer against external shocks. These are not cosmetic improvements. The IMF says reforms since 2023 have strengthened macroeconomic stability, reduced fiscal vulnerabilities, rebuilt external buffers and improved foreign-exchange market functioning.
Yet there is a troubling paradox: the Nigerian economy is becoming more stable while many Nigerian households remain economically fragile. That is the challenge of the next phase.
Should Nigeria stay the course?
Yes—but staying the course must now mean more than preserving macroeconomic stability. It must mean converting stability into productivity, jobs, investment and household prosperity.
The first phase of reform—removing the fuel subsidy, liberalising the FX market, tightening monetary policy and ending deficit monetisation—was essentially about stopping the bleeding. It was painful, but reversing those reforms for short-term political relief would risk restoring the very distortions that produced Nigeria’s fiscal and external vulnerabilities.
The IMF itself argues that sustained reforms are crucial to preserving stability and achieving high, inclusive growth.
But macroeconomic stability is only the platform. It is not the destination.
The next task is to fix Nigeria’s microeconomics—the economy experienced every day by farmers, manufacturers, traders, transporters, workers and households.
First, government must attack the cost of production. Food inflation cannot be defeated by interest rates alone. Farmers need security, irrigation, storage, affordable inputs, rural roads and functioning markets. The IMF identifies security, agriculture, electricity, infrastructure and human capital as priorities for inclusive growth.
Second, electricity must become a productivity revolution. Businesses cannot compete when they must substitute expensive diesel and generators for reliable public power. Power-sector reform must therefore focus on generation, transmission, distribution, metering and investment—not merely tariffs.
Third, government must make productive credit available. High interest rates may be necessary for disinflation, but small businesses cannot expand, employ workers or invest when finance is prohibitively expensive. Targeted, transparent financing mechanisms should support agriculture, manufacturing, housing and export-oriented businesses without undermining monetary stability.
Fourth, infrastructure spending must shift from announcements to measurable outcomes. Roads, ports, rail, broadband and water reduce the cost of moving people and goods. Every major infrastructure project should therefore be judged by the productivity it unlocks.
Fifth, rising public revenue must produce visible public value. Nigerians will accept the logic of stronger revenue mobilisationmore readily when they see better infrastructure, healthcare, education, security and social protection. The IMF has also called for stronger budget processes, transparency and accountability, alongside scaled-up support for vulnerable households.
Finally, Nigeria must accelerate diversification. Oil can strengthen the balance sheet, but it cannot by itself deliver mass prosperity. Agriculture, agro-processing, manufacturing, digital services and other tradable sectors must become engines of exports, employment and income.
The evidence now supports a nuanced conclusion: the reforms are producing important macroeconomic gains, but the transmission from the national balance sheet to the household balance sheet remains incomplete.
That gap must become the central policy challenge.
Nigeria should therefore stay the course—but change the destination from stabilisation to shared prosperity.
The government should protect the gains already made, resist populist reversals, and redirect policy towards productivity, electricity, security, infrastructure, affordable finance, human capital and targeted social protection.
The first phase of reform was about saving the economy from deeper instability. The second phase must be about making the economy work for the Nigerian people.
That is the real test.
If reserves rise but businesses cannot produce, if inflation falls but families remain hungry, and if GDP grows without enough productive jobs, reform has not yet completed its journey.
Nigeria has earned a measure of macroeconomic breathing space.
Now it must use that space to build an economy in which stability is no longer merely a statistic—but something Nigerians can feel in their businesses, pay packets, markets and homes.
Oladipupo, a Public Policy Advocate writes from Akure, Ondo State