Nigeria has spent three years paying the political and social price of economic reform. The removal of the petrol subsidy, foreign-exchange liberalisation, tighter monetary policy and the end of deficit monetisation have begun to restore macroeconomic stability. But stability is not the dividend. The real test is whether Nigeria can use its new economic room for manoeuvre to produce more, export more and negotiate with foreign partners from greater strength.
There are signs of progress. The International Monetary Fund says the reforms have reduced fiscal vulnerabilities, rebuilt external buffers and improved foreign-exchange market functioning. Gross international reserves reached $46bn at the end of 2025, up from $40bn a year earlier. Yet Nigeria remains heavily dependent on imported manufactured goods, foreign technology and capital, while much of its exports remain commodities with limited domestic value addition.
That is the central contradiction of the reform programme. A country can improve its balance sheet without fundamentally changing its economic power.
‘Nigeria should stop measuring partnerships primarily by announced investment and instead ask what capabilities remain. Major agreements should have measurable targets for capital actually deployed, local procurement, jobs, skills, technology transfer and export capacity. Where appropriate, these obligations should be time-bound and publicly monitored.’
Strategic sovereignty is not about rejecting foreign advice or keeping external partners at a distance. It means having sufficient productive capacity, financial resilience, technology and market access to make choices without economic weakness dictating them. Nigeria should therefore treat the next phase of reform as a conversion exercise: turning macroeconomic stability into productive capacity and productive capacity into bargaining power.
The priority is to ensure that fiscal reform changes what the economy can produce. Ending the petrol subsidy removed a major distortion and eased pressure on public finances. But the benefit will be squandered if fiscal gains are absorbed largely by recurrent spending rather than investment that raises productivity.
The government should publish a five-year framework showing how fiscal resources will improve electricity, transport, irrigation, industrial infrastructure and skills. Each major investment should have a baseline, a delivery deadline and publicly reported results. The test should be whether spending lowers production costs and creates jobs and exports, not simply whether budgets are larger.
Foreign-exchange reform faces the same test. A more market-determined naira can improve price discovery and correct distortions, but it cannot make Nigerian products competitive by itself. Reliable electricity, efficient ports, better transport, long-term finance and predictable regulation are what allow firms to respond to exchange-rate incentives.
Nigeria should therefore track a small set of competitiveness indicators annually: non-oil exports, the share of processed exports, manufacturing output, logistics costs and regional market share. If these do not improve, government should explain why.
The second priority is to convert Nigeria’s large domestic market and resource base into bargaining power. A large market is valuable only if it supports competitive domestic production rather than becoming a destination for imports. The African Continental Free Trade Area offers Nigerian firms a larger market, but protection alone will not make them competitive.
The government should identify a limited number of sectors with genuine regional potential and concentrate infrastructure, standards, finance and trade facilitation around them. The emerging cooperation among Nigeria, Ghana, Côte d’Ivoire and Cameroon on cocoa value addition points to a wider possibility: commodity-producing countries can gain leverage by coordinating processing, standards and market access rather than competing mainly as exporters of raw materials.
Nigeria should apply this principle where viable in agricultural processing, petrochemicals, pharmaceuticals, minerals and selected manufacturing. The objective should be to capture more value between the farm or mine and the final consumer.
Foreign partnerships should be judged by the same standard. Nigeria is right to diversify economic relationships with China, the United States, Europe, the Gulf states and other emerging economies. But more agreements do not automatically create more power.
Nigeria should stop measuring partnerships primarily by announced investment and instead ask what capabilities remain. Major agreements should have measurable targets for capital actually deployed, local procurement, jobs, skills, technology transfer and export capacity. Where appropriate, these obligations should be time-bound and publicly monitored.
Nigeria should be negotiating for productive capacity, not simply for capital. The constraints are familiar. Unreliable electricity raises production costs; poor logistics undermine exports; insecurity disrupts farms, transport corridors and energy infrastructure. The government should therefore publish annual targets for industrial electricity reliability, power costs, port clearance times and key logistics bottlenecks. Security spending should likewise be judged partly by whether it restores productive activity in farms, industrial zones and transport corridors.
Finally, reform must survive the political cycle. With the 2027 elections approaching, stricter fiscal rules, transparent reporting and independent monitoring of reform targets can reduce the risk of policy reversal.
The urgency is clear. The IMF estimates that Nigeria grew by 4 per cent in 2025 and projects 4.1 percent growth in 2026. Yet it also estimates that 63 percent of Nigerians lived below the national poverty line and 27 million faced food insecurity in late 2025. Stability has created an opportunity, not yet a dividend.
Nigeria has changed how it manages its economy. It must now change what that economy can do. The ultimate measure of reform is whether the country has more choices than it had before: whether it can produce more, export competitively, develop its own capabilities, and negotiate with the world from strength rather than dependence. That is when economic reform becomes strategic power.