Nigeria Could Have Faced 1,000% Inflation Without Reforms, Says Oyedele

Nigeria could have faced inflation of up to 1,000 per cent if the Federal Government had not introduced major economic reforms, Finance Minister Taiwo Oyedele has said.

Oyedele made the statement on Tuesday at the 56th Annual Accountants’ Conference of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja, where he defended the government’s economic policies despite the rising cost of living affecting households and businesses.

According to the minister, the removal of the petrol subsidy and changes to the foreign exchange market were necessary to address longstanding economic challenges.

He argued that Nigeria had been facing serious financial pressures before the reforms, including foreign exchange shortages, excessive monetary financing and the rising cost of maintaining the petrol subsidy.

Oyedele Links N30tn Money Creation to Inflation

The finance minister attributed part of Nigeria’s current inflationary pressures to approximately N30 trillion in monetary financing, which he said contributed to the increase in prices of goods and services.

He explained that the effects of excessive money creation could take time to become fully visible in the economy.

According to Oyedele, the impact is still being felt by Nigerians through higher prices of essential items, including food.

He maintained that the government’s reforms were aimed at addressing the underlying problems rather than allowing them to worsen.

However, his claim that inflation could have reached 1,000 per cent represents a counterfactual assessment of what might have happened without the reforms, rather than an observed inflation figure.

Government Defends Petrol Subsidy Removal

Oyedele said the previous petrol subsidy arrangement placed significant pressure on government finances and limited the resources available for other public spending.

He also argued that the former foreign exchange system created difficulties for businesses that needed access to dollars for imports, international payments and other commercial activities.

According to him, some international airlines previously struggled to repatriate their earnings from Nigeria, while manufacturers faced challenges obtaining foreign exchange and letters of credit.

The minister said the reforms were intended to address these problems and create a more sustainable economic system.

Despite the government’s position, subsidy removal and exchange rate changes have increased costs for many households and businesses, particularly through higher transport, production and operating expenses.

FG Says Support Measures Are Helping Nigerians

Oyedele acknowledged that Nigerians were still experiencing financial difficulties but said the government was working to increase household incomes faster than inflation.

He disclosed that the Federal Government had spent twice the amount saved from petrol subsidy removal on salary adjustments and wage awards, although he did not provide the actual figures during his remarks.

Other support measures highlighted by the minister included student loans, assistance for vulnerable households and subsidised credit for small businesses.

He also defended the government’s cash transfer programme, saying the use of National Identification Numbers had improved the process of identifying eligible beneficiaries.

Oyedele rejected calls to publish beneficiaries’ personal details, arguing that doing so could compromise their privacy and dignity.

Lagos Governor Highlights Economic Improvements

Lagos State Governor Babajide Sanwo-Olu also defended the economic reforms, saying they had helped strengthen public finances despite the difficulties experienced by Nigerians.

He cited official figures showing that Nigeria’s economy grew by 4.43 per cent in the second quarter of 2026, while inflation declined to 14.63 per cent in September.

Sanwo-Olu also reported that Nigeria’s gross external reserves reached $54.93 billion at the end of September.

He added that Federation Account distributions had increased significantly, providing more revenue for the federal, state and local governments.

However, improvements in economic indicators do not automatically translate into better living conditions for every household. The impact will also depend on income growth, employment opportunities and the cost of essential goods and services.

Transparency Remains Important

Oyedele disclosed that the Federal Government had completed the audit of its 2022 financial statements and pledged to bring outstanding accounts up to date by the first quarter of 2027.

He also said future audited financial statements would be published within six months of the end of each financial year.

Improved financial reporting could help strengthen public accountability and give businesses, investors and citizens a clearer picture of how government revenue is managed.

For Nigeria’s economic reforms to deliver lasting benefits, businesses and households will need to see improvements not only in government finances but also in purchasing power, employment and the cost of doing business.

Conclusion

The Federal Government maintains that its economic reforms helped Nigeria avoid a much deeper financial crisis, with Oyedele arguing that inflation could have reached 1,000 per cent without the changes.

While the government points to improvements in economic growth, foreign reserves and public revenue, many Nigerians continue to face high living costs.

The key challenge will be ensuring that economic stability translates into stronger household incomes, more business opportunities and improved living standards.