*Why hardship cannot be made to testify against the reforms that seek to dismantle the conditions that produced it
By Tanimu Yakubu
The seduction of the wrong conclusion
An increasingly familiar claim in Nigeria is that widespread poverty, nearly three years into the reform programme, is itself proof that the reforms have failed. Poverty remains widespread. Hardship is visible. From those facts comes the claim that the reforms undertaken since 2023 stand condemned. The pain is real; the conclusion does not follow automatically. Nigeria carried deep economic weaknesses into the reform period. Their continued presence does not show that the policies now being used to correct them created them.
The PUNCH report of 16 July 2026 leans on this confusion. It reports severe poverty and vulnerability and places them beneath the phrase “despite reforms”. Those two words quietly invite a causal judgment that the evidence does not establish: reform came, poverty remains, so reform must have failed. Yet the same World Bank and IMF material relied upon in the discussion records stronger macroeconomic conditions, improved resilience and a recovery of confidence, while warning that these gains have not yet reached enough Nigerians through jobs, productivity and household income.
This is not an argument about semantics. It is about what caused what, and therefore about what Nigeria should do next. If inherited poverty is mistaken for proof that reform itself is the problem, policy may be pushed back toward arrangements that had already become costly and unstable.
What the 79 per cent figure actually says
The headline figure must first be rescued from rhetorical inflation. The World Bank’s Streamlined Country Diagnostic, as reported by PUNCH, distinguishes between the ultra-poor, those below the poverty line, and those who are near-poor or vulnerable to falling into poverty. The 79 per cent figure is therefore not a conventional poverty headcount. It combines persons already below the poverty line with others whose economic condition is precarious enough that a shock may push them below it.
This does not make the social emergency smaller. It shows how wide economic insecurity has become. But a household already below the poverty line is not in the same position as a household still above it but one illness, crop failure, job loss or food-price shock away from falling below. Both require protection, but the statistics should not pretend that their conditions are identical.
A poverty crisis older than the reforms
The deeper error lies in historical amnesia. Nigeria did not arrive at May 2023 as a healthy economy suddenly damaged by reform. The country entered the reform period burdened by years of weak per-capita growth, low productivity, insecurity in food-producing regions, unreliable electricity, poor logistics, limited formal employment, inflationary financing, foreign-exchange scarcity, multiple exchange rates, fiscal leakage and a subsidy structure that consumed resources while distributing benefits unevenly.
The World Bank documents cited in the same story place Nigeria’s poverty problem within a much longer history of structural weakness, policy error, dependence on crude oil and repeated external shocks. These pressures accumulated over years. It makes little sense to take poverty built up over that long period, note that it has not disappeared within three years, and then treat its persistence as proof that the reforms are to blame.
The important question is not whether poverty still exists. It plainly does. The important question is whether the forces that kept producing instability and impoverishment are becoming weaker or stronger. On that point, the evidence cited by the article tells a more complicated story than its headline suggests.
The evidence the story cannot comfortably absorb
The World Bank and IMF record an economy that is still under severe social pressure but is not contracting in real terms. World Bank data show real GDP growth of 4.0 per cent in 2025. The IMF’s 2026 Article IV consultation likewise estimated growth at 4.0 per cent in 2025 and projected 4.1 per cent in 2026. Gross international reserves rose to about US$46 billion at the end of 2025 from about US$40 billion a year earlier, while net international reserves rose from US$23 billion to US$35 billion.
These figures do not put food on a table. What they show is that some of the conditions that had made the economy unstable are changing. Growth has strengthened, reserves have risen and the foreign-exchange market has become less distorted. One cannot cite the World Bank when it describes poverty and then discard its evidence when it records real growth and improved external buffers.
The IMF does not recommend abandoning the reforms. It argues that reform must continue alongside stronger social spending, better public financial management and more effective action on productivity, infrastructure and protection of vulnerable households. In plain terms, stabilising the economy is not enough; government must make that stability useful to ordinary people.
The fall in dollar GDP and the shrinking ruler
The decline in the dollar value of Nigeria’s GDP requires a separate correction because it is easily made to say something it does not say. World Bank data put Nigeria’s GDP at about US$290.8 billion in current dollars in 2025, while the same data record real GDP growth of 4.0 per cent. A country cannot at the same time be said, on the strength of those two statistics alone, to have suffered a real contraction merely because the dollar translation of its output is smaller.
Nigeria produces, earns and spends predominantly in naira. National output is measured in domestic prices and can then be translated into dollars. When the naira depreciates sharply, that translation can fall even where the volume of goods and services being produced has increased. The arithmetic is elementary but consequential: dollar GDP is the naira value of GDP divided by the naira-dollar exchange rate. If the denominator rises far faster than nominal naira GDP, the resulting dollar figure falls. That is an exchange-rate effect, not proof of an equivalent loss of real production.
This is particularly important after a large currency adjustment. Comparing GDP converted at an earlier administratively supported exchange rate with GDP converted after the movement toward a market-based rate changes the measuring rod itself. The later dollar figure may be perfectly correct as a conversion at the prevailing exchange rate, yet still be misleading if it is presented as evidence that the economy physically shrank by the same proportion. The number is not necessarily false; the inference drawn from it can be.
The distinction is not an attempt to make depreciation disappear. A weaker naira reduces the foreign-currency value of domestic wages, pensions, savings and assets. It raises the naira cost of imports and can lower household purchasing power. Those are real welfare losses and they help explain the hardship people feel. But they are effects of depreciation, inflation and the distribution of adjustment costs. They should not be recast as proof that Nigeria’s real GDP collapsed when the official real-growth series says otherwise.
For the question of whether productive activity is expanding or contracting, real GDP, real GDP per person, sectoral output, employment, productivity and real household consumption are the more appropriate measures. Current-dollar GDP remains useful for external purchasing power, international comparison and some debt and trade ratios, but it cannot by itself carry a claim about the volume of domestic production. To use it that way is to confuse a change in the ruler with a change in the thing being measured.
The counterfactual that must be faced
Any fair judgment of economic reform has to ask what would probably have happened without it. The comparison is not between Nigeria today and an imaginary country in which years of accumulated problems disappeared at no cost. It is between the course now being taken and a continuation of the policies that came before it.
Would keeping the costly fuel subsidy, multiple exchange rates, severe foreign-exchange shortages, deficit monetisation, weak reserves and worsening investor confidence really have produced lower inflation, more investment, stronger public finances and less poverty? The “despite reforms” argument needs that claim to be true, but the evidence it cites does not prove it. The World Bank and IMF instead describe the earlier policy mix as a source of distortion and the later reforms as part of the improvement in macroeconomic conditions.
None of this means reform is painless, well sequenced in every respect or beyond criticism. Removing a subsidy raises prices immediately, while the benefit to public finances may take much longer to show up in services people can see. Exchange-rate reform can raise the naira cost of imports before exporters and investors have time to respond. Higher interest rates can weaken demand before lower inflation restores purchasing power. These costs are real. But they do not show that the old arrangements could have been sustained indefinitely.
Nigeria was not choosing between reform and an easy life. It was choosing between confronting problems that had accumulated for years and allowing them to grow until the eventual correction became even more painful.
Poverty is a structure, not a single price
Nigeria’s poverty cannot be explained by one fuel price, one exchange rate, one tax decision or one monetary policy move. It is rooted in low productivity, weak education and health outcomes, insecurity, rapid population growth, poor agricultural yields, unreliable power and transport, limited access to finance, too few formal jobs and large regional gaps in opportunity.
Macroeconomic reform cannot solve all of these problems by itself. But a government that is losing revenue, rationing foreign exchange and financing deficits in ways that worsen inflation has less room to solve them. Stabilisation does not equal development. It gives development a firmer base from which to proceed.
This is where the reforms must become visible in everyday life. Electricity must allow businesses to produce at lower cost. Roads and rail must move goods to market. Security must allow farmers to return safely to their land. Schools must teach children effectively. Healthcare must stop illness from wiping out household savings. Cash support must reach people who cannot wait for growth to improve their incomes. And jobs must be real, lasting and decently paid.
If these improvements do not follow, then the reforms will not have delivered what Nigerians were entitled to expect from them. But the fact that they have not yet gone far enough is a reason to finish the work, not to restore the distortions the country is trying to leave behind.
Progress must not become propaganda
A defence of reform loses credibility if it talks past the hardship people are living through. Growth of about four per cent is better than before, but it is still too weak to transform living standards rapidly in a country with a fast-growing population. Stronger reserves do not feed a family. A smaller deficit does not raise a worker’s pay. Higher government revenue improves welfare only when it becomes reliable power, roads, schools, hospitals, security, productive investment and effective support for people in distress.
The World Bank’s April 2026 Nigeria Development Update records continuing high inflation and weak living standards even as macroeconomic conditions improve. That is not an argument for reversing reform. It is an argument that the gains have not yet reached households quickly or widely enough.
That leads to two very different policy choices. If the reforms themselves created the poverty crisis, then reversing them would make sense. But if they have corrected major weaknesses while jobs, productivity and household incomes have been too slow to respond, then the answer is to make the reforms work better and faster for people. The material cited by the article points much more strongly to the second conclusion.
The test that reform must now pass
Government should therefore be judged by demanding, practical results. Is improved stability bringing new investment? Is that investment raising output and productivity? Are better jobs being created? Are wages beginning to outrun prices? Is higher public revenue paying for development rather than simply increasing the cost of government? Are the poorest being protected while the economy adjusts? Those are the tests Nigerians have a right to apply.
If, after a reasonable period, investment does not rise, productive capacity does not expand, public spending does not improve, exchange-rate reform does not encourage more domestic and export production, and growth remains too weak to lift real incomes, then criticism of the programme will be deserved.
But that judgment should be based on what the reforms actually produce over time, not on treating poverty inherited from earlier years as though it began with them. Poverty is too serious to be used as a rhetorical shortcut. It deserves a careful account of causes, costs and results.
The improvement in macroeconomic conditions also raises the standard government must meet. As exchange-rate fragmentation, fiscal leakage and inflationary financing are reduced, Nigerians are entitled to ask a harder question: what has government done with the room those changes have created?
What the evidence actually permits us to conclude
Nigeria entered the reform period with widespread poverty and deep economic vulnerability. The reforms brought real short-term costs while correcting serious weaknesses in the economy. Since then, real output, reserves, the foreign-exchange market and aspects of public finance have shown measurable improvement. But those gains have not yet reached enough people through better jobs, higher productivity and stronger real incomes.
The fall in the current-dollar value of GDP does not overturn that conclusion. It reflects, to a substantial extent, the translation of naira output through a much weaker exchange rate. It says something important about Nigeria’s external purchasing power and the foreign-currency value of domestic incomes; it does not establish an equivalent fall in the quantity of goods and services produced.
That is as far as the evidence safely takes us. “Poverty despite reforms” turns an unfinished programme into a final verdict. The continued existence of hardship does not, by itself, explain what caused it. Poverty is one of the strongest reasons reform must succeed; it is not proof that reform was wrong.
Nigeria’s real choice now is not whether to recreate the policies that produced foreign-exchange shortages, fiscal leakage and instability. It is whether the country can turn greater economic stability into more production, more private investment, better jobs, lower inflation, better public services and rising incomes.The poverty numbers should be read with full seriousness. They warn against complacency and show how much remains to be done. But they do not cancel the improvements already recorded. The task now is to make those improvements reach the household, the workplace, the farm and the market.
