Nigeria's sweeping economic reforms are beginning to deliver measurable gains, but their long-term success will depend on whether they are translated into deeper structural transformation, the Chief Economic Adviser to the President, Dr Tope Fasua, has said.
Speaking at the Nigeria–South Africa Chamber of Commerce April breakfast meeting in Lagos, Fasua described the administration's policy direction as a decisive shift from incremental adjustments to what he termed “hard resets,” driven by the urgency to confront long-standing distortions in the economy.
“We are defined by reforms, not because everything is perfect, but because the cost of delay has become too high,” he said.
Key Reforms Implemented
At the centre of the policy shift are the removal of fuel subsidies, exchange rate liberalisation, tax reforms and tighter control of oil revenues under Executive Order 9.
According to Fasua, the elimination of petrol subsidy in May 2023 has freed up about $10 billion (over N13 trillion yearly) with the savings now reflected in increased fiscal flows, particularly to subnational governments.
He added that exchange rate reforms have moved the naira into a managed float system, allowing market signals to play a stronger role while the Central Bank of Nigeria (CBN) only intervenes when necessary to stabilise the market.
Tax reforms introduced from January 2026, he noted, are aimed at expanding the revenue base by capturing activities within the largely untaxed informal sector, while Executive Order 9 is designed to improve transparency and government access to oil proceeds.
“The idea is simple, let the country actually see its money,” he noted.
Impact on Petroleum Sector
The economist said the impact of the reforms is most evident in the petroleum sector, where Nigeria is beginning to reverse decades of dependence on imported refined products. With the emergence of large-scale refining capacity, including the Dangote Petroleum Refinery, the country now produces part of its fuels locally while also exporting refined products.
This, he said, has reduced import dependence, improved foreign exchange retention and created new opportunities for local industries, with smaller refiners also scaling up operations.
Crude Oil a Mirage
Fasua challenged the long-held assumption that crude oil remains the backbone of government revenue, citing data that shows that Nigeria retains only about 35 to 40 per cent of oil earnings after accounting for production costs and contractual arrangements.
“Crude oil has become a mirage in the way we analyse our finances,” he said, adding that government revenues are increasingly tied to taxation and domestic economic activity.
He said the 68.3 trillion 2026 budget reflects the shift, particularly with capital expenditure accounting for nearly half of total spending. However, he argued that the size of the budget remains insufficient given Nigeria's development needs. He noted that Nigeria's low per capita public spending continues to limit the country's ability to deliver critical infrastructure, healthcare and education at the scale required.
Role of State Governments
Fasua also drew attention to the growing role of state governments in the evolving fiscal structure, noting that reforms at the federal level have effectively shifted more resources and development responsibility to subnational governments. He argued that well-structured borrowing remains critical for financing large-scale infrastructure that can drive economic expansion, urging states to leverage their balance sheets more effectively.
