The federal government has said Nigeria is not in economic collapse but is going through a difficult adjustment process aimed at correcting long-standing structural problems in the economy.
Director General of the Budget Office of the Federation, Dr. Tanimu Yakubu, made this known in a statement issued in Abuja, where he acknowledged the hardship currently being experienced by Nigerians but insisted it reflects a deliberate reform process.
“The current hardship, though undeniable, reflects a deliberate process of correcting structural imbalances that have persisted for years,” he said, adding that “distress is evident, but it must not be mistaken for systemic failure.”
Yakubu explained that countries facing true economic collapse do not carry out key reforms such as unifying exchange rates, rebuilding foreign reserves, regaining access to international capital markets, or improving government finances. He noted that Nigeria is making progress in these areas despite ongoing challenges.
He said for years the country operated an economic system that appeared stable on the surface but was weakened by deep inefficiencies, including fuel subsidies, multiple exchange rate windows, and heavy government spending that encouraged profit-making through arbitrage rather than real production.
According to him, these policies largely benefited a small segment of the population while placing hidden costs on the wider economy. Their removal, he said, has exposed the true cost of running the system, leading to higher prices but also improving transparency and restoring confidence in economic management.
On government finances, Yakubu said recent data shows improvement following the removal of the fuel subsidy, with revenues shared under the Federation Account rising by more than 40 percent. He attributed this to better remittance practices and reduced leakages.
He added that Nigeria’s public debt remains below 30 percent of Gross Domestic Product, describing it as moderate compared to other emerging economies, while external reserves have risen above $40 billion, based on figures from the Central Bank of Nigeria.
At the state level, he said higher revenues are helping governments meet salary obligations more regularly, with some states introducing adjustments to cushion the effect of rising prices, an indication of improving fiscal space.
The Budget Office boss identified inflation as the most immediate challenge facing the country, linking it to exchange rate changes, higher energy costs, and long-standing supply constraints. He noted, however, that global experience shows such inflationary pressures are often temporary when reforms are sustained.
“The greater risk lies not in reform itself, but in policy inconsistency or reversal,” he said.
Yakubu acknowledged that public frustration is understandable, stressing that Nigerians have every right to expect better living conditions. However, he urged citizens to distinguish between short-term hardship and a breakdown of the economic system.
He maintained that Nigeria’s institutions remain functional, government finances are improving, and reforms are ongoing, describing the current situation as a phase of adjustment rather than decline.
Looking ahead, he said the next stage of reforms must focus on translating economic gains into real improvements in people’s lives through investments in healthcare, education, and targeted social support programmes.
He warned that the success of the reforms will ultimately be judged by their impact on everyday life, not just policy decisions.
Yakubu also cautioned against abandoning the reform process, noting that doing so would weaken investor confidence, reverse progress, and bring back the distortions that previously slowed economic growth. “This moment demands patience, discipline, and resolve. Nigeria is not collapsing; it is undertaking a necessary correction and laying the foundation for a more resilient economic future,” he said.
Credit: thenationonlineng.net
