In May 2023, Nigeria’s net reserves stood at just $859 million, less than a month of imports. Nobody declared a collapse. Collapses rarely announce themselves.
They arrive as small refusals: a supplier who will not ship, an investor who will not return. An airline that sells tickets but cannot repatriate its earnings. A power company waiting months for foreign exchange to import critical turbine parts while cities sit in darkness. A military unable to easily procure equipment, munitions and spare parts as foreign exchange shortages collide with rising security threats. A parent unable to pay a child’s school fees abroad. A debit card that stops working for a subscription that cost only a few dollars.
By mid-2023, trapped foreign-airline funds had climbed to about $850 million. Manufacturers queued for scarce foreign exchange. Banks rationed access to dollars.
Countries do not fail only when they run out of money. They fail when confidence disappears. When businesses no longer know what a currency is worth. When investors doubt they can take money out. When suppliers demand cash in advance because promises are no longer enough.
Nigeria’s Minister of Finance, Professor Taiwo Oyedele, said the country had “a month or two” left. This report examines what the escape has bought, and what it has not.
The Cliff
Headline inflation would later peak at 34.19%, while food inflation reached 40.8%. The official and parallel exchange rates were more than 60% apart, rewarding round-tripping by the well-connected while the productive economy struggled for dollars. Nigerian letters of credit were increasingly losing credibility with foreign suppliers.
More than ₦30 trillion had been printed through Ways and Means, worth over $20 billion at the time. Debt-service payments consumed 97% of government revenue, and about 27 states struggled to pay salaries.
Oyedele’s counterfactual is blunt. Without reform, Nigeria would have faced hyperinflation and a naira well beyond ₦2,000 to the dollar, with little investor confidence and no ability to print foreign currency. That remains a projection, but the economic conditions of 2023 give the argument considerable force.
Fifty Years of Pain
In 1973, a litre of petrol cost 6 kobo. By 2023 it cost ₦195, a 3,050-fold increase in nominal terms. Each increase imposed pain on Nigerians, yet none resolved the underlying distortions.
The Minister’s argument is that this is the first period in decades where painful reforms have begun to address those distortions rather than merely postpone them. The benefits, he says, are already beginning to accrue. The proper test is outcomes, not rhetoric.
The Account Book
Growth has risen from 2.74%, barely matching population growth, to 4.43% in the second quarter of 2026.
In nominal U.S. dollar terms, Nigeria’s economy expanded by about 17% in the first half of 2026 compared with the same period in 2025. The increase was aided by the appreciation and stabilisation of the naira against the dollar, and it placed Nigeria among the stronger-performing large economies during the period.
The International Monetary Fund (IMF) ranked Nigeria among the ten largest contributors to global GDP growth for the year, a position rarely associated with the country in recent decades.
Inflation has fallen from a peak of 34% to 14.63% in September.
Net reserves have risen from $859 million to more than $45 billion, roughly fiftyfold, while gross reserves exceed $55 billion, an 18-year high. Debt service has fallen from 97% of revenue to under 60%. Tax-to-GDP has increased from about 7% to about 12.5%. The capital market has expanded from roughly ₦30 trillion to more than ₦160 trillion. The naira now trades around ₦1,330-₦1,350 to the dollar.
Fitch, Moody’s and S&P have upgraded Nigeria and revised their outlooks to positive. The country has exited the FATF grey list and the EU deficiency list. Federation Account revenue grew by 44% from 2024 to 2025. Oyedele rejects the “money illusion” critique, arguing that real growth has substantially outpaced inflation over the past two years.
For ordinary Nigerians, he points to the following:
• ₦372.6 billion in NELFUND support for more than 1.5 million students.
• Cash transfers worth over ₦600 billion to more than 10 million households with a plan to increase it to 15 million households.
• Single-digit loans to more than 800,000 MSMEs.
• Income-tax exemptions for earners up to about ₦100,000 per month.
• Corporate income-tax exemptions for small businesses with annual turnover of up to ₦100 million.
The Bridge and the Bill
The proposed $21.7 billion financing plan is where much of the debate will be fought. The Minister describes it as investment rather than borrowing and emphasises that it remains a plan. Nigeria may not draw down the entire amount, and the average project lifespan is approximately five years.
His case rests on the terms. About $7.9 billion would come from multilateral and bilateral partners, including approximately $5 billion from the World Bank at an average interest rate of 2.1%. Social-sector loans average about 2%, while the commercial component carries an indicative average rate of 7.8%, below the November 2025 Eurobond rate.
About $10.6 billion is earmarked for transport infrastructure, while roughly $4.8 billion would go to states, the FCT and government agencies.
The Minister’s test is simple: borrow ₦1, create more than ₦1 of value, and the country becomes richer. He points to the Dangote Refinery as an example of how large investments can transform economic outcomes.
“Investment” is his framing. The $21.7 billion remains debt, and it becomes an asset only if the projects generate returns greater than their cost.
The Test
The collapse was avoided, by the Minister’s account and by lived experience, but the work is unfinished. Food prices remain high. Single-digit inflation is a target for the end of 2027, not yet a reality. Fiscal discipline through the election period is a commitment, not yet a record.
Yet the picture is no longer one of imminent crisis. Nigeria has moved from emergency management to rebuilding. Foreign reserves have recovered. Credit ratings have improved. Investment is returning. State revenues are rising.
By 2028, readers should judge the reforms by four measures: inflation, food prices, debt service as a share of revenue, and whether the roads, railways and power projects being financed today are completed and in use. If those indicators continue to improve, then 2023 will be remembered not as the year Nigeria nearly went over the cliff, but as the year it stepped back from it and began a difficult but rewarding climb forward.
POSTSCRIPT: This review is based on the Minister of Finance’s media chat at the Presidential Villa, Abuja. Figures cited are drawn from Professor Taiwo Oyedele’s presentation and publicly available data.