The Economist: After Painful Reforms, Nigeria’s Economy Bearing Results

*Warns optimists to be cautious

*Naira ends January stronger, closes at  N1,391/$ on official mkt

*Stock market begins 2026 on positive note, gains N6.8trn

James Emejo in Abuja, Nume Ekeghe and Kayode Tokede in Lagos

After a spate of painful reforms initiated by President Bola Tinubu on assumption of office in 2023, Nigeria’s economy has begun to yield salutary results, a report by a British journal, The Economist, has stated.This emerged as the naira closed the month of January on a firmer note at the official foreign exchange market, sustaining its recovery below the N1,400/$ threshold for the third consecutive trading day.

Also, in January, the stock market section of the Nigerian Exchange Limited (NGX) appreciated by N6.8 trillion. The feat recorded by the Nigerian bourse was attributed to impressive corporate earnings by some listed companies and government’s reforms.Continuing, The Economist noted that though poverty had risen, Tinubu’s  package of drastic structural reforms appeared to be a “bitter medicine” helping to fix the economy, adding “It is difficult to overstate the mess Mr Tinubu inherited.”It noted that Tinubu had abolished the fuel subsidy and abandoned the multi-tiered system of dollar-pegged exchange rates, largely allowing the naira to float.

The central bank aggressively tightened monetary policy to curb the resulting bout of inflation.The government also moved to improve security in the Niger Delta and offered a range of tax incentives to investors to boost dwindling oil production, the report stated.It stated that nearly three years on, the country’s 230 million population, especially the poor and the middle class, are still reeling from increases in fuel and food prices.

However, following bold reforms, the country’s annual inflation which hit a nearly 30-year high of 34.8 per cent in December 2024, fell to 15.2 per cent in December 2025.The Economist further acknowledged that growth was returning as the IMF forecast the economy to expand by 4.4 per cent in 2026.Among other gains from the reforms, the report pointed out that the naira had stabilised following two steep devaluations in 2023.

The central bank’s foreign-exchange reserves have also risen to $46 billion, their highest level in seven years.The report noted that improvements in macroeconomic stability are restoring investor confidence.“On January 22nd Shell, a British company, said it hopes in 2027 to finalise plans, with partners, to develop a $20 billion offshore oilfield that has been sitting untapped for over 20 years.

“Exxon Mobil, an American firm, has committed $1.5 billion to deepwater development until 2027.“Local business leaders are more upbeat, too. Oil-and-gas production is rising, much of it driven by local firms plugging leaks and improving output in onshore projects in the Niger Delta, which has become safer thanks to Mr Tinubu’s focus on security there.“All this should give the government some fiscal breathing room, particularly as the cheaper naira begins to raise the competitiveness of Nigeria’s non-oil exports such as cocoa and cashew nuts,” it added.The report further opined that results from structural reforms could start to pay off for the president as he gears up to run for a second term in 2027.

The Economist said, “Recent reforms to taxation and tax collection, Mr Tinubu’s latest project, should help improve revenues further in the coming years.“Falling inflation should eventually begin to ease the cost-of-living pain.”The report however, said optimists have reasons to be cautious despite improvements.It said, “Savings from the fuel subsidy have largely been spent on servicing the public debt, which is still rising as the government continues to borrow against future sales of oil to fund its deficit.

“Currently, some 60 per cent of revenues are consumed by debt service.“On January 20th Nigeria’s finance minister said the government hoped to borrow less this year, but current budget projections suggest that is not realistic.”The Economist further noted, “When Nigeria returned to civilian rule in 1999, Olusegun Obasanjo, the elected president, set out to clean up the economy after years of mismanagement by military governments.

Initially dismissed by critics, by the end of his second term Mr Obasanjo’s liberal policies had tamed inflation, spurred investment and raised annual gdp growth to around 7 per cent. It didn’t last.Over the past decade GDP per person has fallen. Yet evidence is now mounting that another stretch of “golden years”, as one analyst calls the period following Mr Obasanjo’s liberalisation, may be on the cards.“In the past two and a half years Bola Tinubu, who in Mr Obasanjo’s day was the governor of Lagos and was elected president in 2023, has been enacting his own set of structural reforms. As he gears up to run for a second term in 2027, they may be starting to pay off.”

The report added, “It is difficult to overstate the mess Mr Tinubu inherited.“When he took office in 2023, the country’s central bank had $7 billion (equivalent to 1.4% of GDP at the time) in obligations it could not meet, prompting international investors to flee en masse.“The bank’s credibility had been dented by a recklessly loose monetary policy, its mismanagement of dwindling foreign-exchange reserves and efforts to maintain an unsustainable tiered exchange-rate system.

“In 2022 alone the cash-strapped government spent some $10 billion, equivalent to 2.2% of GDP, on a ruinous fuel subsidy.”

Naira Ends January Stronger, Closes at N1,391/$1

The naira closed the month of January on a firmer note at the official foreign exchange market, sustaining its recovery below the N1,400/$ threshold for the third consecutive trading day.

At the Nigerian Foreign Exchange Market (NFEM), the local currency settled at N1,391/$1 yesterday, representing a N6 depreciation from N1,385/$1 recorded the previous trading day.

Nonetheless, the naira’s end-of-month performance reflected improving sentiment at the official market following a series of gains recorded earlier in the week.

The improved performance at the official market was mirrored at the parallel market, where the naira appreciated by N20 in a single day to close at N1,450/$1, compared with the N1,470/$1 recorded the previous day.

NFEM data showed that the naira began trading in January at N1,431/$1 on January 2, having closed December 31 at N1,429/$1, reflecting a cumulative N35 gain over the period.

On a year-on-year basis, naira also posted a notable improvement. From N1,475/$1 on December 31, the naira recorded an appreciation of about 6 per cent YoY, reinforcing signs of relative stability at the official market despite ongoing structural pressures.

However, analysts cautioned against reading too much into the short-term gains. Ayokunle Olubunmi noted that the recent momentum may not yet be broad-based or sustainable.

He said: “We need to first even see if the momentum continues. It could be somebody that is offloading some position, and if that is the case, that impact won’t be persistent. You don’t see that trend playing out in both the official market and the parallel markets. What we just saw is actually on the official market.”

Stock Market Begins 2026 on Positive Note, Gains N6.8trn

Meanwhile, the stock market section of the gerian Exchange Limited (NGX) appreciated by N6.8trillion in January 2026.

Amid its strong fundamentals, the stock market had crossed the N100 trillion mark early 2026 as prior reforms by the CBN, and NGX  sustained  the market rally.

Specifically, the market capitalisation added N6.8 trillion or 6.8per cent to close  at N106.15 trillion as of January 30, 2026 from N99.376 trillion it closed December 31, 2025.

Consequently, the NGX All-Share Index closed January 2026 at 165,370.40 basis points, about 6.27 per cent or 9,757.37 basis points Year-till-Date (YtD) growth from 155,613.03

basis points the stock market opened for trading this year.

Compared to January 2025, the NGX All-Share Index closed at 104,496.12 basis points, about 1.53 per cent or 1,569.72 basis points YtD growth when compared to 102,926.40 basis points the stock market closed for trading in 2024.

Despite investors trading the stock market with caution, the major indices also appreciated in January 2026.

For instance, the NGX Oil & Gas Index with 13.8 per cent growth to close at  3,038.79 basis points led others in January 2026, followed by NGX Insurance  Index that appreciated by  11.8 per cent to close at 1,329.16 basis points.

In the months under review, the NGX Banking Index advanced by 6.99 per cent to close at 1,621.77  basis points;  NGX Industrial Goods Index advanced by 5.45 per cent to close January 2026 at 5,985.87 basis points, while the  NGX Consumer Goods Index gained 3.2 per cent to close January 30, 2026 at 4,103.12 basis points.

However, the outcome of a successful recapitalisation by some banks continued to impact on the NGX Banking index.

Investment Banker & Stockbroker, Tajudeen Olayinka in a chat with THISDAY said the growth in early 2026, was a reflection of positive stock market performance in 2025, stressing that investors are hopeful to receive full 2025 results from public companies listed on the stock exchange, having digested all the three quarters’ results previously released to the market by these companies.