AERE: Economy stabilising, but Nigerians limping, wailing

The Alliance for Economic Research and Ethics (AERE) has said Nigeria’s economy is beginning to stabilise after years of major economic distortions, but warned that the real test for the Federal Government is whether the improvement will translate into better living conditions for Nigerians.

In a policy statement titled “The Economy is Stabilising: Now Let the People Feel It,” the Chairman of AERE, Dr Dele Kelvin-Oye, said recent improvements in key economic indicators should be seen as the beginning of recovery and not the end of the journey.

“Stability is a floor, not a finished house,” Kelvin-Oye said, arguing that the government must now move beyond improving economic figures to making everyday life easier for households and businesses.

He said an economy should not only be attractive to investors but should also work for ordinary families.

According to him, Nigerians should acknowledge areas where progress has been made, while also recognising that the gains have not yet translated into broad prosperity.

Kelvin-Oye credited the administration of President Bola Tinubu with pushing through difficult reforms that previous governments had avoided, including the removal of petrol subsidy, changes to the foreign exchange system, tighter monetary policy and efforts to strengthen Nigeria’s external reserves.

He acknowledged that the reforms caused significant hardship in the short term, but said they were aimed at correcting long-standing problems that had weakened the economy.

“This is not a small achievement. Reform is easy to announce and difficult to sustain,” he said.

He explained that efforts to change a distorted economy often face political pressure, public resistance, vested interests and institutional weaknesses.

AERE said one of the major improvements was the clearer direction of economic policy.

The group cited the International Monetary Fund (IMF), which said reforms implemented in recent years had strengthened Nigeria’s economic stability and ability to withstand shocks, although living conditions remained difficult for many Nigerians.

Kelvin-Oye, however, stressed that stronger economic indicators should not be confused with improved household welfare.

On the foreign exchange market, AERE said reforms had included the move towards a more market-driven system, the consolidation of previously separate market segments and efforts to clear verified foreign exchange obligations.

It said the measures were intended to make the exchange rate more transparent, reduce opportunities for arbitrage and restore confidence in the market.

Nigeria’s foreign exchange reserves have also strengthened.

According to the IMF, gross international reserves increased from $40 billion at the end of 2024 to $46 billion at the end of 2025, while net reserves rose from $23 billion to $35 billion.

Nigeria’s reserves subsequently climbed to $53.11 billion as of August 24, 2026, representing a 17-year high.

AERE said the stronger reserves gave Nigeria a bigger cushion against external shocks and improved its ability to support financial stability.

But Kelvin-Oye warned that rising reserves would not, by themselves, put more food on people’s tables or improve healthcare, electricity supply and household incomes.

Economic growth is another area where the country has recorded improvement.

According to the National Bureau of Statistics (NBS), Nigeria’s real Gross Domestic Product (GDP) grew by 4.43 per cent year-on-year in the second quarter of 2026, compared with 3.89 per cent in the first quarter.

AERE said both the oil and non-oil sectors recorded stronger activity, while the IMF projected 4.1 per cent growth for Nigeria in 2026, following an estimated 4.0 per cent expansion in 2025.

The group said the figures suggested that economic growth was becoming broader, particularly in services and other non-oil activities.

AERE also acknowledged reforms by the Central Bank of Nigeria (CBN), including preparations for inflation targeting, stronger regulation of the financial sector, new capital requirements for banks and closer oversight of areas such as virtual assets, payment systems, consumer protection and financial inclusion.

The group said the IMF had also recognised progress in bank recapitalisation, preparations for inflation targeting, Nigeria’s exit from the Financial Action Task Force (FATF) grey list and recent tax reforms.

On government finances, AERE cited the World Bank’s assessment of improvements in domestic revenue collection, external balances and fiscal management.

The World Bank’s April 2026 Nigeria Development Update projected public debt to fall from 42.5 per cent of GDP in 2024 to 39.8 per cent in 2025. However, the consolidated fiscal deficit widened slightly from 2.8 per cent to 3.1 per cent of GDP.

Kelvin-Oye said the figures should not be interpreted as proof that Nigeria’s economic problems had disappeared.

Instead, he said they showed that efforts to repair the country’s finances were beginning to produce results.

The biggest challenge, he said, was closing the gap between what the economic statistics show and what Nigerians experience every day.

“Macroeconomic stability is necessary. It is not sufficient,” he said.

AERE pointed to warnings from the World Bank that household incomes had not fully recovered and poverty remained high.

It also cited an IMF estimate that poverty had reached 63 per cent at the national poverty line, while about 27 million Nigerians faced food insecurity in autumn 2025.

The group described the situation as a “poverty paradox” — where the national economy can show signs of improvement while many households continue to struggle with falling purchasing power and rising living costs.

“The economy can be improving in the aggregate while citizens are deteriorating in particular,” the policy paper stated.

To close this gap, AERE called for a stronger focus on food production and productivity instead of relying mainly on short-term measures to reduce prices.

It identified insecurity, poor transport networks, inadequate storage, unreliable electricity, trade barriers and the high cost of farm inputs as some of the major problems driving food prices.

The organisation also called for a transparent social protection system that can cushion vulnerable households against economic shocks.

It stressed, however, that cash transfers should complement rather than replace jobs, quality education, healthcare and infrastructure.

AERE also urged greater transparency in government borrowing, saying Nigerians should be able to know why money is borrowed, the terms of the loans, repayment schedules and what the funds are expected to achieve.

It said government projects should also be judged by their impact rather than the number of projects commissioned.

According to the organisation, a capital project should be considered successful only when it improves transportation, healthcare, education, electricity, business productivity or food affordability.

Kelvin-Oye further warned that the burden of economic reforms must be shared fairly.

He said Nigerians should not continue to bear the cost of reforms while waste, poor accountability, procurement problems and lack of transparency remain in the public sector.

He said the Tinubu administration had taken important steps by confronting fuel subsidy distortions, foreign exchange inefficiencies, deficit financing and weak revenue collection.

He added that the next stage required better implementation and delivery.

“Courage at the beginning of reform must become competence at the point of delivery,” he said.

Kelvin-Oye said the ultimate measure of economic reform would not simply be the size of Nigeria’s reserves, GDP growth, debt ratio or number of policies introduced.

Rather, he said, it would be whether Nigerians could afford food and healthcare, secure decent jobs, run businesses without unbearable costs and compete fairly.

“The street is not an enemy of economic reform. The street is its final court,” he said.

He added: “Nigeria has begun to stabilise. Now it must begin to heal.”

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