The Central Bank of Nigeria (CBN) says the Federal Government’s economic reforms have helped Nigeria avoid a looming macroeconomic crisis while gradually restoring investor confidence.
This was stated by Muhammad Abdullahi, Deputy Governor for Economic Policy at the CBN, during the Agora Policy Stakeholders’ Dialogue on Nigeria’s Economic Reforms held in Abuja on Thursday.
The event, themed “Sustaining and Deepening Economic Reforms in Nigeria,” brought together policymakers and stakeholders to assess the country’s reform trajectory.
According to Abdullahi, Nigeria faced severe macroeconomic imbalances before the reforms were introduced. These included distortions in the foreign exchange market, rising fiscal pressures from petrol subsidies, and declining foreign portfolio investment.
He noted that the existence of multiple exchange rates previously allowed certain individuals to access subsidised foreign exchange and resell it at a profit, creating significant inefficiencies in the system.
“Alongside the foreign exchange distortions, the country was spending heavily on petroleum subsidies, which together consumed about six per cent of GDP. These subsidies were simply not sustainable and had brought the economy to the brink,” Abdullahi said.
He explained that when the current administration assumed office in October 2023, Nigeria faced a backlog of about $7 billion in unmet foreign exchange obligations, which had weakened investor confidence.
Following a verification process conducted by a global auditing firm, $4.5 billion of the claims were validated and settled, while $2.5 billion were found to be illegitimate.
Abdullahi also highlighted broader structural challenges affecting the economy, including declining oil sector revenues and weak foreign direct investment inflows.
At the start of the administration, Nigeria’s net external reserves stood at about $800 million, despite higher gross reserve figures due to swap obligations and other liabilities. He said the country’s total reserves have now risen to about $32 billion.
According to the deputy governor, inflation has also declined over the past 19 months, with food inflation reaching its lowest level in more than a decade.
He added that non-oil exports have rebounded strongly, reaching $6 billion in 2025, with a near-term target of $12 billion.
Business activity indicators have also shown improvement. Nigeria’s Purchasing Managers’ Index (PMI) has recorded its strongest expansion in nearly a decade, suggesting rising economic activity across key sectors.
“Though the reforms were painful, they were necessary to stabilise the economy. We did not have the luxury of choice at that time; decisive action was required,” Abdullahi said.
Also speaking at the event, Sanyade Okoli, Special Assistant to the President on Finance and the Economy, said the administration’s Renewed Hope Agenda has helped create a more stable macroeconomic environment.
She stressed the importance of attracting both domestic and foreign investment to support inclusive economic growth.
Meanwhile, Ojobo Atuluku, Board Chair of Agora Policy, said the dialogue was organised to promote deeper discussions on sustaining and improving ongoing economic reforms.
The event was supported by the Nigeria Economic Stability and Transformation Programme, funded by the UK Foreign, Commonwealth & Development Office.
