Nigeria’s unmet FX demand would have grown from $7 billion in 2023 to $10 billion in 2025 had the Federal Government not embarked on FX and trade reforms, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele has said.
The Federal Government recently embarked on critical reforms in FX, exchange rate, oil and gas, trade and taxation to reposition the economy for growth and development.
In a report-Economic Overview and Highlights of Current Fiscal & Tax Reforms- released to the media, the tax expert, explained that the reforms have led to trade surplus, unified FX rate, clearance of FX backlog, rise in foreign reserves and use of naira cards for international transactions abroad.
These developments, he said, meant that the painful but necessary reforms embarked by the Federal Government are beginning to yield positive macro results.
He disclosed that trade deficit, multiple FX windows, unmet FX demand, and declining foreign reserves and zero FX in naira cards abroad dominated the pre-reforms era of 2023.
Also, on the fiscal position (tax, budget and debt) before the reforms, he said tax-to-Gross Domestic Product (GDP) ratio was less than 10 per cent, debt service-to-revenue was around 97 per cent, there were high deficit, low capital expenditure and N30 trillion Ways & Means.
The reforms, he said, have led to tax-to-GDP rising to 13.5 per cent, debt service-to-revenue less than 50 per cent, there is declining deficit, more infrastructure spend and moderation in Ways & Means.
He disclosed that without the reforms, tax-to-GDP would have been less than 10 per cent, debt service-to-revenue would have hit 100 per cent, capital expenditure near-zero and N50 trillion Ways & Means.
On subsidy, inflation and prices, Oyedele disclosed that pre-2023, there was unsustainable petrol subsidy which led to product scarcity, high inflation and rising interest rates.
Then came the reforms, leading to petrol subsidy removal, product availability, moderating inflation and high but easing interest rates.
Without the reforms, petrol subsidy would have collapsed by now, product scarcity would have persisted, leading to hyperinflation and very high interest rates.
In the oil and gas sector, pre-2023 era was dominated by declining crude oil & gas production, oil theft, low investor confidence.
Also, the reforms led to rising crude oil & gas production, reduced oil theft, investment returning. Without the reforms, there would have been encumbered oil & gas production, low investment and more divestment.
Oyedele said although there was rising poverty, declining decent job opportunities in pre 2023 era, although with the reforms, high poverty still exists but prospect of improving job opportunities as firms recover remains high.
Without the reforms, the country would have been facing more poverty and fewer decent jobs at present.
Continuing, he said the pre-reforms era of 2023 was dominated by market-unfriendly policies, weak coordination, poor communication and inefficient financial management. The reforms, he said have brought about market-friendly policies (capital market reforms), stronger coordination and communication and improved fiscal management.
Not embarking on the reforms would have led to policy inconsistency, market-unfriendly policies and inefficient fiscal management.
Before the reforms, Nigeria faced weak sovereign credit standing, but the reforms led to sovereign credit rating upgrades, and stronger investor confidence. Without the reforms, there would have been no upgrades and investment climate would have worsened.
According to the Central Bank of Nigeria (CBN) Governor, recent assessments by rating agencies have provided significant external validation of Nigeria’s reform trajectory.
Fitch, Moody’s, and Standard & Poor’s have all acknowledged the positive impact of Nigeria’s reforms, from stronger reserves to improved fiscal discipline and greater FX transparency.
Across all three agencies, the direction is consistent: fundamentals are strengthening, reform credibility is rising, and Nigeria’s risk profile is improving.
Fitch upgraded Nigeria from B- to B (stable), recognising our commitment to orthodox policies including FX reform, monetary tightening, and ending deficit monetisation. Moody’s also raised its rating from Caa1 to B3 in May, citing improved fundamentals and a stronger outlook. And just this November, S&P affirmed B-/B and revised its outlook to positive, underscoring sustained reform momentum, rising reserves, and enhanced macroeconomic resilience.
Moody’s has also concluded its periodic review and while headlines may highlight risks, as rating agencies are mandated to do, the substance of the report reaffirms ongoing improvements, including stronger fiscal metrics and deeper diversification.
“These nuances matter and this is precisely why we must continue to tell our own story clearly, consistently, and confidently. Nigeria’s model-implied scores are trending upward, and as reforms deepen and data continues to validate progress, these legacy qualitative reservations will diminish paving a clearer path to future upgrades,” he said.
“These endorsements of Nigeria’s policy direction have translated directly into improved borrowing terms, increased investment inflows, and enhanced credibility. Underscoring this progress, Nigeria last year, successfully raised US$2.35 billion through a Eurobond issuance, attracting US$13 billion in orders, the largest in the nation’s history,” he added.
