Budget Office insists ‘Nigerian economy undergoing correction, not collapse’

*Dr. Tanimu Yakubu, Director-General, Budget Office of the Federation, argues that countries facing true ‘economic collapse’ will not carry out key reforms, including unifying exchange rates, rebuilding foreign reserves, regaining access to international capital markets, or improving government finances to MDAs and sub-nationals

Isola Moses | ConsumerConnect

Contrary to claims of economic downtown in the country, the Federal Government has insisted that Nigeria is not in economic collapse of any sort but it is undergoing a difficult adjustment process, aimed at correcting long-standing structural problems in the economy.

Dr. Tanimu Yakubu, Director-General, Budget Office of the Federation, noted this in a statement in which he acknowledged the hardship currently being experienced by Nigerian consumers.

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Yakubu rather insisted that the move reflects a deliberate reform process.

He stated: “The current hardship, though undeniable, reflects a deliberate process of correcting structural imbalances that have persisted for years. Distress is evident, but it must not be mistaken for systemic failure.”

The Director-General of the Budget Office of the Federation also argued that countries facing true economic collapse would not carry out key reforms, including unifying exchange rates, rebuilding foreign reserves, regaining access to international capital markets or improving government finances.

Yakubu emphasised that Nigeria is making progress in these areas despite ongoing challenges.

According to him, for years, the country operated an economic system that appeared stable on the surface but was weakened by deep inefficiencies, including fuel subsidy, multiple exchange rate windows and heavy government spending that encouraged profit-making through arbitrage rather than real production.

The Director-General further said these policies largely benefited a small segment of the Nigerian population while placing hidden costs on the wider economy.

He submitted that the removal of the controversial fuel subsidy has exposed the true cost of running the system.

The measure has led to higher prices but also improving transparency and restoring confidence in economic management in the country, stated he.

On government finances

Yakubu said recent data indicated improvement, following the removal of fuel subsidy, with revenues shared under the Federation Account rising by over 40 percent.

He described this as a development attributed to better remittance practices and reduced leakages in the system.

The Budget Office DG further added that Nigeria’s public debt remains below 30 percent of Gross Domestic Product (GDP).

Yakubu described this as “moderate”, compared to other emerging economies, while external reserves have risen above $40 billion, based on figures from the Central Bank of Nigeria (CBN).

At the state level, he said higher revenues are helping governments to meet salary obligations more regularly, with some states introducing adjustments to cushion the effect of rising prices, an indication of improving fiscal space.

He equally identified inflation as the most immediate challenge facing the country, linking it to exchange rate changes, higher energy costs and long-standing supply constraints.

The Budget Office Chief Executive, however, said that global experience showed such inflationary pressures are often temporary when reforms are sustained.

He explained: “The greater risk lies not in reform itself, but in policy inconsistency or reversal.”

Yakubu as well acknowledged that public frustration is understandable.

Yet, he emphasised that Nigerian consumers 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.

Nigeria’s institutions remain functional, government finances are improving and reforms are ongoing, he noted, describing the current situation as a phase of adjustment rather than decline.

Going forward, Yakubu 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.

Doing so, he cautioned, would weaken investor confidence, reverse progress and bring back the distortions that previously slowed economic growth.

The Director-General of the Budget Office added: “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.”

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