Market News

By : Victoria Nwachukwu

Despite the recent rebound of the naira, coupled with several efforts by President Bola Ahmed Tinubu’s administration to drive economic prosperity, many Nigerians may not experience improved living conditions or have access to more economic opportunities, Chairman of the Alliance for Economic Research and Ethics (AERE), Dele Kelvin Oye, said.

The naira had strengthened in recent weeks, trading around N1,360/$ at the parallel market as of February 26, 2026, compared to lows beyond N1,800.

Vice-President Kashim Shettima recently suggested that the currency could even appreciate to N1,000 per dollar under different intervention conditions.

But Oye, who is the immediate past chairman of the Organised Private Sector of Nigeria (OPSN) and NACCIMA, argued that the currency appreciation alone does not automatically translate to lower prices, more jobs or reduced poverty.

“The naira’s rebound reflects real reform, a credible CBN and Nigerian entrepreneurial grit. But fiscal dominance, huge deficits, debt service and inefficient spending remain counterweights. Without fiscal prudence, private-sector facilitation and inclusive spending, appreciation will stay a market statistic and not support improvement for most Nigerians,” he said.

He admitted that the right monetary policies have helped to anchor market expectations and raised foreign reserves to over $50 billion.

“Here is where the story gets sticky. Fiscal dominance is when government spending and borrowing overpower the central bank’s inflation fight, a tug-of-war between the Finance Ministry and the CBN, often ending in higher inflation or instability.

“Nigeria is living with that tension. The 2026 budget, titled ‘Budget of Consolidation, Renewed Resilience and Shared Prosperity,’ is approximately N58.18 trillion with a deficit of N23.85 trillion (4.28 per cent of GDP). Debt service eats up a huge slice of revenue, and actual receipts keep falling short of projections, even as federation revenue rose from N16.8 trillion (2023) to N31.9 trillion (2024).

“Deficit finance and borrowing remain high, and most of the sub-national spending leans toward unnecessary projects, new bus terminals and government lodges, rather than income-generating assets. The result: inflation eases only slowly. According to the National Bureau of Statistics (NBS), headline inflation fell to 15.1 per cent in January 2026 (down from 15.15 per cent in December), but food pressures persist, squeezing households.

Fiscal dominance risks undermining the CBN’s credibility if unchecked,” Oye argued.

He advised fiscal discipline, spending efficiency, social cushioning and improved business environment among other measures. He said the federal government must curb borrowing, put a cap on local public borrowings and use the improved allocations to pay back part of local previous borrowings/ bonds to crash commercial banks’ interest rates and stimulate private sector access to reasonably priced capital.