Declining inflation rate, $51bn FX reserves surge… NRS says economy showing signs of full recovery
The Nigeria Revenue Service (NRS) says Nigeria’s economy is showing strong signs of full recovery and accelerated growth following a series of “painful” reforms by President Bola Tinubu.
In an internal report, the NRS said the positive trajectory is a result of Tinubu’s “economic management acumen and doggedness” in implementing his reforms as part of his renewed hope agenda.
“The Nigerian economy has moved decisively from acute macroeconomic distress toward a more stable and increasingly resilient footing,” the revenue service said.
The agency said the incumbent administration inherited “four mutually reinforcing distortions”, including a fiscally unsustainable fuel subsidy regime.
Other distortions, according to the NRS, are an opaque forex system that discouraged investment, a non-performing oil sector, and a tax base “far below its potential”.
However, the NRS said with the reforms and after the initial economic pains, all indices now point to a significant recovery as evident in retreating inflation rates.
The tax body said the movement of Nigeria’s balance of payments from deficit to surplus, its first-ever net petrol export, the doubling of tax collections in nominal terms, and the reshaping of the country’s productive base are other signs of recovery.
NIGERIA NOW A NET EXPORTER OF PETROLEUM PRODUCTS’
“Minimum wage has also doubled between 2023 and 2026,” the report reads.
“While policies and incentives introduced by the government have reduced out-of-school children from 20 million to 18.3 million, according to estimates by the United Nations Children’s Fund (UNICEF).
“The government’s naira-for-crude arrangement with Dangote Refinery and other local refineries has ensured that Nigeria has become a net exporter of petroleum products after decades of being net importers.
Ghana recently decided to pursue a similar policy in its oil sector. From approximately 1.2-1.3 million barrels per day in 2023, production has risen to 1.73 million barrels per day by July 2026, equivalent to 104% of the country’s OPEC quota.”
On the benefits of economic stability, the revenue authority said the NGX has grown from a market capitalisation of N30.36 trillion in 2023 to N161 trillion in 2026, creating wealth for millions of Nigerians who invest in the stock market.
The agency linked the rally partly to improved macroeconomic credibility, banking-sector recapitalisation and the growing pool of domestic institutional investment.
‘DEBT-TO-GDP RATIO IS NOW FALLING
Tax collections more than doubled from N12.3 trillion in 2023 to N27.1 trillion as of July 2026 with the digitisation of tax systems, four new tax reform laws, the transformation of the revenue service and an executive order that closed loopholes in the system,” the NRS report said.
“Nigeria’s debt-to-GDP ratio that was rising for years is now falling as a result of economic growth, which has moved from 2.74% in 2023 to 3.8% in the first half of 2026, while external reserves moved from an unrestricted $3.99 billion in 2023 to a 17-year high $51.9 billion as of July 2026.
At the same time, the country’s balance of payments moved from a $3.34 billion deficit to a S$2.38 billion surplus in the first quarter of 2026.”
The report said Nigeria’s trade position has also undergone an equally striking turnaround, noting that the country moved from a marginal trade surplus of about N44.7 billion to a N7.55 trillion surplus in the first quarter (Q1) of 2026.
The composition of exports is also beginning to change, the agency said.
According to the NRS, while crude oil remains dominant, exports of other oil products rose 51 percent year-on-year to N6.78 trillion in Q1 2026.
Annual capital importation increased from US$3.9 billion in 2023 to US$23.22 billion in 2025. In the first quarter of 2026 alone, inflows reached US$10.37 billion,” the report further reads.
“Foreign portfolio investment has been particularly strong, while foreign direct investment has also improved.
“Three years ago, Nigeria had no large-scale CNG programme and depended overwhelmingly on imported petrol and diesel.
“By 2026, more than 100,000 vehicles had reportedly been converted, with more than $2 billion in investment mobilised and over 10,000 jobs created.”
AGRICULTURE MINISTRY ALLOCATION INCREASED TO N826.5BN’
The report estimated that CNG running costs can be 40 percent to 60 percent cheaper than petrol.
“For commercial drivers, some monthly fuel bills have reportedly fallen from around ₦50,000 to ₦18,000 following conversion,” the NRS said.
“The government has also significantly increased its policy focus on food security.
“Following the declaration of a state of emergency on food security in July 2023, measures included the release of strategic grain reserves, a ₦100 billion National Agricultural Development Fund, fertiliser distribution and an agricultural mechanisation programme.”
The reported noted that federal agricultural allocation rose from N228.4 billion in 2023 to N826.5 billion in the 2025 budget.
It said food prices fell by about 50 percent in March 2026, according to the ministry of agriculture.
However, the NRS cautioned that agriculture requires several planting seasons for increased policy support to translate fully into higher output.
“At first glance, Nigeria’s debt stock appears to have worsened, rising from ₦87.4 trillion in 2023 to ₦159.28 trillion in late 2025,” the tax body said.
“But the more meaningful measure — debt relative to the size of the economy — has moved in the opposite direction.
“The debt-to-GDP ratio fell from 38% in 2023 to 35.5% in 2025 and then to 32.3% in 2026.”
The report described this as the first sustained decline in more than a decade, noting that debt servicing as a share of revenue has also fallen from 68 percent to 53 percent projected by the International Monetary Fund IMF.