For millions of Nigerians, the past three years of economic reforms have brought significant hardship, but emerging indicators suggest the difficult adjustments are beginning to yield results. The Chairman, Nigeria Revenue Service, Zacch Adedeji says stronger revenue, investment, production and financial stability are laying the foundation for broader prosperity. Dike Onwuamaeze brings the excerpts:
For millions of Nigerians, the past three years have been a period of difficult economic adjustment. The removal of petrol subsidy, changes in the foreign exchange market, tighter monetary conditions and other structural reforms came with higher costs and significant pressure on households and businesses.
Yet, beneath the immediate pain, a different story has been unfolding in the fundamentals of the Nigerian economy.
According to the Executive Chairman of the Nigeria Revenue Service (NRS), Dr. Zacch Adedeji, Nigeria has now moved beyond the most difficult phase of adjustment and is beginning to enter a period of consolidation, with several key macroeconomic indicators pointing in a more positive direction.
Adedeji’s assessment in a recent interview, is significant because it provides an insight into how the economic reforms introduced by President Bola Tinubu since May 2023 are changing the underlying structure of the economy.
His argument is that the reforms should not be judged only by the immediate discomfort they created, but also by the distortions they have corrected, the capacity they are creating and the stronger economic platform they are building for the future.
“Nigeria’s economy is showing strong signs of full recovery and accelerated growth following a series of necessary reforms by the current administration,” Adedeji said.
He added: “The economy has moved decisively from acute macroeconomic distress to a more stable and increasingly resilient footing.”
The reforms were never designed to correct structural weaknesses that had accumulated over many years and were increasingly becoming unsustainable.
The NRS identified four major distortions inherited in May 2023. These are an unsustainable petrol subsidy regime, a fragmented and opaque foreign exchange market, an oil sector producing substantially below capacity and a tax base operating far below its potential.
The Tinubu administration’s response was to tackle these problems simultaneously.
The removal of petrol subsidy and the unification of the foreign exchange market were the two foundational adjustments.
Stronger Fiscal Foundation
One of the clearest indicators of the changing economic landscape is government’s revenue.
Tax collections increased from N12.3 trillion in 2023 to N21 trillion in 2024 and N28.3 trillion in 2025. In the first eight months of 2026 alone, total collections stood at N27.1 trillion. The tax-to-GDP ratio also increased from 10.3 per cent in 2023 to 13 per cent.
These figures are important because Nigeria’s long-standing fiscal weakness has been one of the country’s biggest economic vulnerabilities. For years, government revenue has been inadequate relative to the size of the economy and the scale of the country’s infrastructure and development needs. Low revenue has meant limited fiscal space, greater dependence on borrowing and difficulty financing critical public investments.
Adedeji said the tax reforms simplified administration and broadened the revenue base.
He explained that digitalisation, expansion of the tax base and the implementation of the new tax framework were among the factors driving the increase.
The national e-invoicing system for large taxpayers is one of the digital initiatives supporting compliance, while four new laws that came into effect on January 1, 2026—the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Establishment Act and Joint Tax Board Establishment Act—are expected to further modernise the tax system.
The transformation of the former Federal Inland Revenue Service into the Nigeria Revenue Service also broadened the revenue consolidation framework by bringing together non-tax revenue streams previously collected by other government agencies.
Most encouragingly, the NRS said non-oil sources now account for 76 per cent of total collections.
From FX Market Distortion to Greater Transparency
Another major reform was the unification of the foreign exchange market. Before the reform, the existence of multiple exchange rates created significant distortions. The gap between official and parallel-market rates encouraged arbitrage and made it difficult for businesses and investors to determine the true value of their investments.
Adedeji illustrated the problem by recalling the disparity between the official and parallel markets.
“When you have exchange rate at N463 and the official rate is roughly at N1,200, you have zero capital importation,” he said.
Investors need certainty. A company considering a major investment must be able to determine how much its capital is worth, what it will cost to import equipment and how much revenue it can repatriate. An opaque exchange-rate system makes those calculations difficult. The reform has therefore sought to restore price discovery and make the market more transparent.
According to the NRS, the improvement in exchange-rate stability and liquidity conditions has strengthened business confidence and enabled companies and investors to make longer-term decisions with greater certainty. Investment is the bridge between macroeconomic stability and economic growth.
When businesses are confident enough to invest, they expand factories, purchase equipment, employ workers, increase production and develop new markets. The benefits eventually move from the balance sheets of companies to the wider economy. This is one reason the current reform period should be viewed as a process rather than a single event.
Oil Production: Unlocking Nigeria’s Dormant Capacity
The oil sector provides another important illustration of the changing economic landscape. Nigeria has enormous oil reserves, but production has frequently remained below potential because of theft, vandalism, underinvestment and regulatory uncertainty. According to the NRS, crude production had recovered to approximately 1.73 million barrels per day by August 2026, equivalent to about 104 per cent of Nigeria’s OPEC quota. That compares with production of between 1.2 million and 1.3 million barrels per day around the beginning of the reform period.
The recovery was attributed to intensified security operations against pipeline vandalism and crude theft as well as continued implementation of the Petroleum Industry Act. The PIA has been important because investors need regulatory and fiscal certainty before committing billions of dollars to long-term oil and gas projects. Higher production means greater export earnings, stronger government revenue and improved foreign exchange availability.
More importantly, increased investment in the sector can generate activity across engineering, logistics, construction, services and other supporting industries. The NRS also pointed to major upstream transactions involving Seplat Energy and Aradel Holdings as developments capable of strengthening the long-term prospects of the sector by expanding reserves and production capacity.
According to the NRS, Nigeria’s domestic refining capacity increased from approximately 30,000 barrels per day in May 2023 to about 700,000 barrels per day by mid-2026. About 90 per cent of domestic petrol supply is now reportedly being met through local refining, while diesel imports fell to zero by May 2026. That represents a fundamental shift in an economy that for decades exported crude oil and imported large volumes of refined petroleum products.
Adedeji directly linked the development to the removal of petrol subsidy.
“If Mr. President had not removed subsidy, there is no way [the] refinery will work,” he said.
The crude-for-naira arrangement between the Nigerian National Petroleum Company Limited and Dangote Refinery has also reduced the dollar demand associated with fuel imports, according to the NRS.
Stronger Banks, Stronger Businesses
The banking sector recapitalisation represents another important component of the reform programme. A stronger banking system is essential if Nigeria is to finance the next phase of economic growth.
According to the NRS, stronger bank capital positions will improve the capacity of financial institutions to support large-scale corporate financing and provide businesses with greater access to capital for expansion. The significance of this reform may become more visible over time.
Bank recapitalisation is about creating financial institutions with sufficient balance-sheet strength to support a growing economy. When banks have stronger capital, they are better positioned to absorb shocks and finance productive activities.
Adedeji said the combined effect of monetary, fiscal, tax and structural reforms had created a more predictable environment for capital-intensive and export-oriented businesses.
“These reforms have improved the overall business climate and reduced structural inefficiencies,” he said.
The NRS boss also highlighted an improvement in Nigeria’s debt-to-GDP ratio, which he said declined from 35.5 per cent in 2025 to 32.3 per cent in 2026. The agency attributed the decline largely to nominal GDP growth outpacing debt accumulation and noted that the ratio remained below the IMF’s 55 per cent risk threshold. At the same time, it acknowledged that debt-service-to-revenue remains an issue that requires continued attention.
The Human Side of Reform
Adedeji argued that without the reforms, many more Nigerians could have fallen into poverty.
“If you remember where we are coming from… if we’ve not done what we are supposed to do, possibly double of that population will have gone to poverty, and I’m telling you that progress is what we should measure,” he said.
Nigeria inherited significant economic distortions. The government has now begun correcting them. The question is how quickly the benefits can reach households.
Adedeji pointed to state finances as one example, saying state governments are no longer as heavily reliant on federal support to pay salaries.
He also highlighted improved access to credit for civil servants and the student loan scheme.
“Before now, nobody talks about student loan. Based on the last check, more than one million students in 300 higher institutions have been disbursed more than N303 billion to them in the last three years. This has never been in existence,” he said.
For a student who can remain in university because of access to financing, the reform has a human face. For a state government that can meet its salary obligations more reliably, the reform has a human face. For a company that can plan investment because the foreign exchange market is more predictable, the reform has a human face. For a refinery producing fuel locally rather than relying entirely on imports, the reform has a human face. While the transmission from macro to micro takes time, it begins with the macroeconomic foundation.
President Tinubu’s reforms have generated considerable debate because they challenged long-standing arrangements that had become deeply embedded in Nigeria’s economy. But the latest assessment by the NRS suggests that the country is beginning to see the benefits of correcting those structural weaknesses.
Adedeji described the President’s approach as an example of the courage required to act as “a statesman and not a politician.”
Some of the government’s policies may be politically difficult in the short term but economically necessary in the long term. The real test, however, is whether those decisions eventually produce a better economy.
The task now is to sustain that momentum. Nigeria cannot afford to return to the distortions that produced the crisis in the first place. The country must continue improving productivity, protecting vulnerable households, supporting businesses and ensuring that increased government revenue translates into visible public value. If that happens, the painful adjustment period can ultimately become the foundation for a more productive economy.
