Lagos watched the naira strengthen to ₦1,340 per dollar—a remarkable recovery from lows exceeding ₦1,600—yet 139 million Nigerians remain trapped in poverty, exposing a troubling disconnect between macroeconomic indicators and lived reality.
The contradiction defines Nigeria's economic paradox in early 2026. While Vice President Kashim Shettima boasted the currency could have reached ₦1,000/$ under different conditions, the World Bank's October 2025 update revealed poverty surged from 87 million to 139 million people in just two years—a 60% increase that dwarfs the naira's nominal gains.
"The naira's rebound reflects real reform, a credible CBN, and Nigerian entrepreneurial resilience," Chief Dele Kelvin Oye, chairman of the Alliance for Economic Research and Ethics, told AllAfrica. "But without fiscal discipline and inclusive spending, currency appreciation remains merely statistical rather than tangible improvement for ordinary citizens."
The numbers tell the story of divergence. Headline inflation eased to 15.10% in January 2026, down from crisis levels, while federation revenue nearly doubled from ₦16.8 trillion in 2023 to ₦31.9 trillion in 2024. Yet Nigeria's 2026 budget carries a ₦23 trillion deficit—40% of the total ₦58 trillion spending plan—signaling the government continues borrowing heavily despite revenue improvements.
In Nigeria, as across Africa's giants, challenges are real but entrepreneurial energy and cultural creativity drive progress. The naira's recovery demonstrates the Central Bank's credibility restoration and the power of monetary reform. Lagos fintech startups still attract billions in investment, Nollywood exports continue expanding, and Nigerian diaspora remittances provide crucial foreign exchange.
But Oye identifies fiscal dominance as the counterweight undermining monetary gains. Government borrowing to cover massive deficits absorbs liquidity, crowds out private investment, and fuels inflation despite Central Bank efforts. The paradox: a stronger currency coexists with deepening poverty because fiscal policy contradicts monetary discipline.
Food prices remain the crisis within the crisis. While headline inflation moderates, food costs stay elevated, hitting Nigeria's 200+ million population hardest. Over 60% of Nigerians are under 25, yet youth unemployment persists amid government spending that prioritizes debt service over job creation or social investment.
The Abuja administration faces an uncomfortable truth: currency strength alone cannot deliver prosperity when 67% of the population lives on less than $2 per day. Federation revenue nearly doubled, yet poverty exploded—suggesting revenue gains flowed to debt payments, recurrent costs, and inefficient programs rather than poverty reduction or infrastructure development.
Nigeria's tech sector demonstrates what's possible when entrepreneurial dynamism meets enabling conditions. Lagos startups raised over $5 billion despite power grid failures and regulatory uncertainty. Imagine what Nigeria could achieve if fiscal policy matched monetary discipline—if the ₦23 trillion deficit became ₦23 trillion in productive investment.
The naira's recovery is real, not illusory. Central Bank credibility matters. But Oye's warning resonates: without fiscal discipline, without inclusive spending reaching the 139 million in poverty, Nigeria risks becoming a case study in how macroeconomic stabilization can coexist with social deterioration.
Nigerian entrepreneurial energy remains unmatched across the continent. The question is whether Abuja's fiscal policy will harness or squander that dynamism. Currency strength provides breathing room—but only fiscal reform converts breathing room into broadly shared prosperity.
