The Nigerian economy has staged a resurgence over the past year, driven primarily by a swathe of policy reforms under the current administration (as discussed in previous articles). Since 2023, the focus has centred on course correction – stop the bleeding, insulate the economy, stabilise the currency and protect the most vulnerable. While some green shoots can be attributed to external factors (geopolitical upheaval, subsequent impact on commodity prices, and easing global interest rates that revived investor appetite for frontier markets), much of the progress witnessed can be attributed to policy measures enacted across the Central Bank, the Finance Ministry and the tax authorities.

A brief summary of the current state. The IMF projects GDP growth of 4.2% in 2026, compared with the 3.04% recorded in 2023 at the start of reform implementation. Inflation sat at 14.6% in September 2026 against 28.9% at the end of 2023 – granted, the 2025 CPI rebasing flatters the comparison. Gross FX reserves of 55bn(c.46bn net, according to CBN Governor Olayemi Cardoso’s remarks at the Nigeria-Asia Connectivity Dialogue) compare favourably with 32.9bnasofDecember2023(4.0bn net).

These numbers matter less for what they say about the past than for what they now make possible. Easing inflation has given the Central Bank room to cut its policy rate – most recently to 23% in September – lowering the cost of working capital for producers. Stronger reserves give the Central Bank firepower to keep the naira stable, so businesses can plan purchases of imported equipment and inputs with confidence. Steadier growth with slower price rises leaves households more to spend on locally made goods. But the window may not stay open. How we manage this upturn will determine how insulated we are from future commodity price shocks (which would put substantial pressure on our FX income, inflation, debt service and capital markets).

We’ve been here before. From the early 2000s through the 2010s, policy was characterised by a concerted push toward local production and reducing Nigeria’s reliance on global markets for sustenance. Local content rules, import tariffs and tax concessions were the order of the day and facilitated a burgeoning local cement industry (among others). By and large, however, these protectionist policies did not create the manufacturing economy the government had envisaged. For lack of local capacity, they instead resulted in higher costs passed through to consumers – think of import taxes on finished vehicles which were designed to support local assembly or the restrictions on rice imports.

Here we are again: momentum is positive. J.P. Morgan’s inclusion of Nigerian bonds in its GBI-EM Edge (frontier local-currency bond index) suggests we are travelling in the right direction, as does the bank’s reported N50bn (c.$38m) capital deposit with the Central Bank toward a merchant banking licence. We now need to be proactive about next steps. The lesson from the past is not that protection fails, but that it fails without capacity. This time, the sequence must be reversed: capacity first, protection last. A reconfigured transformation agenda should therefore centre on a bottom-up approach, leveraging assets already on the ground and building the tools with which we can eventually deliver on the promise of a manufacturing economy.

Creating tangible, well-funded programmes to upskill a largely informally employed youth populace, while unclogging a dysfunctional power sector, would be a credible first step. Fibre must follow close behind. Fixed broadband penetration sits at just 8.4%, against over 30% in Senegal. Project BRIDGE, the public-private partnership to lay 90,000km of open-access fibre across the country, was approved in 2024 but only incorporated its delivery company in August 2026 – it must become an execution priority. The World Bank, in its October 2025 project appraisal, estimates that, if successful, the programme could add 1.5 percentage points to annual GDP growth by 2031.

Agribusiness also needs to be prioritised. Nigeria has vast arable land and, to date, shallow industrial capabilities. A large share of crops, especially perishables such as tomatoes, rot before reaching market – by some estimates 40-50% – the most vivid illustration of output lost for lack of organisation. We also have a large domestic market – a growing portion of which faces food insecurity. More than nine in ten working Nigerians are in informal jobs, according to the National Bureau of Statistics (Q2 2024): they are working, but not productively, and that is the gap this sector can close.

Federal and state governments have a key role to play, with a variety of models available to bolster production. Processing crops such as rice, cassava, tomato, soybeans and maize could create semi-skilled jobs in rural areas, keeping value in the country by replacing imports with local output (rather than via outright bans). Power provision through dedicated mini-grids is key, as unreliable power is an acute killer of processing margins. Storage is another under-developed area, where co-funding or government guarantees for private cold-chain investment (through the Bank of Industry or DFI guarantee lines) would be transformative.

The third model is aggregation. Under outgrower schemes, an anchor buyer or aggregator organises smallholders, supplies certified seed and fertiliser, and buys the harvest at an agreed price, recovering the cost of inputs from what it pays. This is precisely where the Anchor Borrowers’ Programme fell short: credit reached farmers without reliable inputs, storage or a guaranteed buyer, and repayment suffered. Routing public credit guarantees through aggregators, rather than lending to individual farmers, builds repayment into the purchase.

Vietnam offers the contrast via its economic transformation policies, which focused on improving supply first vs. our historical demand restriction strategy. Vietnam made land rights more secure – land-use rights became transferable and could be used as collateral (incentivising further investment from farmers) – freed prices and invested in irrigation, high-yield seed varieties, road construction and rural credit through a state-sponsored bank (à la Bank of Agriculture). Building these rails boosted productivity and allowed for diversification into other forms of produce. Vietnam had food shortages in 1988; it was exporting rice by 1989.

The government’s role is not to farm or mill but to do three things only: build the public goods (rural power, feeder roads, fibre), lower the risk private capital can’t carry (guarantees routed through aggregators, enforceable warehouse receipts, certified inputs), and fix the rules (land titling by state governments, conditional protection). Tariffs and bans should come last as rewards for capacity built, not substitutes for it.

Nigeria has course-corrected over the past few years, thanks to strong policy decisions and favourable macro conditions. As we look ahead, we should convert that stability into capacity. Oil prices will not stay elevated forever. Make hay while the sun shines.

Samuel Adeleke Adelaja is a director at AR Capital