By ifeoma Onyekachi

Nigeria’s economic difficulties are part of a deliberate reform process rather than signs of systemic collapse, according to the Director-General of the Budget Office of the Federation, Tanimu Yakubu.

Yakubu said the current hardship being experienced across the country reflects a necessary transition aimed at correcting long-standing structural imbalances and restoring macroeconomic stability.

In a statement issued in Abuja on Wednesday, he explained that recent policy decisions by the federal government are designed to strengthen fiscal discipline, improve transparency, and rebuild investor confidence, even as Nigerians grapple with rising living costs.

He rejected assertions that the economy is in decline, arguing instead that key indicators show gradual recovery. These include the unification of the exchange rate, growth in external reserves, and renewed access to international capital markets.

“Countries in true economic collapse do not unify exchange rates, rebuild external reserves, regain access to international capital markets, or improve fiscal performance,” Yakubu said. “Nigeria, despite significant pressures, is making measurable progress across these indicators.”

He noted that for years, the economy operated under policies that created artificial stability while masking deep inefficiencies. According to him, measures such as fuel subsidies, multiple exchange rate regimes and expansionary fiscal practices encouraged arbitrage and weakened productivity.

Yakubu said the removal of these distortions particularly the elimination of fuel subsidies and exchange rate unification has exposed the real cost structure of the economy, contributing to inflationary pressures but also improving policy clarity and credibility.

Providing further insight, he stated that fiscal performance has strengthened in recent months, with distributable revenues to the Federation Account increasing by over 40 per cent following subsidy removal. He attributed this to improved remittance discipline and reduced leakages.

The Budget Office boss added that Nigeria’s public debt remains below 30 per cent of Gross Domestic Product (GDP), while external reserves have risen above 40 billion dollars, suggesting a more stable fiscal outlook.

At the subnational level, Yakubu said increased allocations to states are beginning to translate into more consistent salary payments, with some state governments introducing inflation adjustments for workers an indication, he noted, of gradually expanding fiscal space.

While acknowledging the strain on households and businesses, Yakubu maintained that the reforms are essential to placing the economy on a more sustainable and productive path.