By Tanimu Yakubu
In periods of economic adjustment, citizens naturally judge government performance through the prices they encounter in markets, petrol stations and grocery stores. Those experiences are real and deserve serious attention. Yet sound economic analysis requires more than observing nominal price movements. It requires measuring those changes against the value of the currency itself. When that principle is ignored, misleading conclusions can emerge from otherwise accurate figures.
Recent political commentaries and infographics have circulated widely, purporting to demonstrate the performance of the Nigerian economy between May 2023 and May 2026 by comparing selected prices in naira terms. The figures typically show substantial increases in the prices of petrol, cooking gas, rice, cement and other commodities, alongside the depreciation of the naira from approximately ₦460/$ to ₦1,380/$.
While citizens are entitled to debate the costs and benefits of economic reforms, it is equally important that such debates are conducted on the basis of sound accounting principles and honest measurement.
Measuring economic performance using a currency that has itself changed significantly in value is akin to measuring the height of a building with a rubber ruler that stretches while the measurement is being taken. The apparent result may change dramatically, even though the underlying object has not. This is the essence of what may be described as the Rubber-Ruler Fallacy.
What Happens When the Figures Are Properly Normalized?
Using the exchange rates cited in the infographic itself, the picture changes considerably.
A bag of rice presented as having risen from ₦40,000 to ₦100,000 appears at first glance to have increased by 150 percent. However, when translated into dollars, the price moves from approximately $86.96 to $72.46, representing a decline of about 17 percent.
Cooking gas, shown as increasing from ₦10,000 to ₦22,000, appears to have risen by 120 percent in naira terms. Yet its dollar value falls from approximately $21.74 to $15.94, a decline of about 27 percent.
Cement rises from ₦4,500 to ₦14,000 in naira terms, but its dollar-denominated value increases only modestly from approximately $9.78 to $10.14, an increase of roughly 4 percent.
Petrol remains the major exception. Its price rises from ₦238 to ₦1,281 per litre, translating from approximately $0.52 to $0.93 per litre. The increase reflects not merely exchange-rate adjustment but also the removal of a longstanding subsidy that had concealed the true fiscal cost of the product.
The numerical exercise above does not imply that Nigerians are better off merely because some prices appear lower when converted to dollars. Households earn, spend and save largely in naira. The calculations simply demonstrate a narrower point: the popular infographic does not measure what it claims to measure.
The Accounting Reality Behind the Reforms
For many years, Nigeria operated an economic system that suppressed visible prices through fuel subsidies, exchange-rate rationing, quasi-fiscal interventions, payment arrears and implicit government liabilities.
These arrangements often produced prices that appeared affordable on the surface while transferring costs to government balance sheets, future budgets, public debt and foreign exchange reserves. Economic reforms undertaken since 2023 have sought to bring these hidden liabilities into the open.
As a result, prices now reflect costs that were previously concealed through subsidies, administrative controls and deferred obligations. This transition has undoubtedly imposed adjustment costs on households and businesses. No responsible government should dismiss those realities.
It is important to recognize that households experience economic reality in naira, not dollars. The hardship associated with inflation is therefore genuine and should never be dismissed. The purpose of normalization is not to deny hardship; it is to ensure that economic comparisons isolate the effect of policy from the effect of currency depreciation.
The more important policy question is whether Nigeria should continue financing artificially low prices through unsustainable fiscal distortions, or whether it should build a more transparent and sustainable economic foundation for long-term growth.
On Reform Sequencing and Affordability Constraints
There is room to debate the sequencing of reform measures. However, such debates must acknowledge the fiscal circumstances confronting the country at the time the reforms were undertaken.
By 2023, Nigeria had substantially depleted the reserves supporting an administratively managed exchange-rate regime. Fuel subsidies had become a major drain on public finances. Electricity subsidies remained in place and continue to impose significant fiscal costs today. Meanwhile, government was increasingly financing these obligations through borrowing, accumulated liabilities and extensive recourse to Central Bank overdrafts.
In these circumstances, sequencing was not simply a matter of economic preference; it was constrained by affordability. Maintaining multiple subsidies simultaneously required resources that had largely ceased to be available on a sustainable basis.
Indeed, it would be inaccurate to suggest that no sequencing occurred. The electricity subsidy remains in place today, demonstrating that government did not eliminate all forms of support simultaneously. Rather, the most fiscally destabilising subsidy was addressed first, while other forms of support were retained despite their continuing budgetary cost.
Reasonable observers may differ on whether the pace of adjustment was optimal or whether more extensive cushioning measures should have accompanied the reforms. Those are legitimate policy questions. What is more difficult to sustain is the proposition that an alternative sequencing could have been implemented without regard to affordability constraints. A reform sequence that cannot be financed is not an alternative strategy; it is merely a postponement of adjustment financed through debt, reserve depletion, inflationary financing or deferred obligations.
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A Call for Honest Debate
There is room for legitimate disagreement about the pace, sequencing and social impact of reforms. There is room to debate whether government should have done more to cushion vulnerable households and businesses from the transition.
What should not be in dispute, however, is the need for analytical consistency. If naira depreciation is presented as evidence, then naira-denominated prices must also be translated into a common unit of account before meaningful conclusions can be be drawn.
The question before Nigeria is not whether adjustment has imposed costs. It clearly has. The question is whether those costs should be confronted transparently today or deferred through borrowing, reserve depletion and hidden liabilities that future generations must eventually bear.
Reasonable people may disagree about the pace of reform, the adequacy of social protection measures or the sequencing of policy actions. What should unite all sides of the debate is a commitment to measuring economic outcomes using consistent standards.
Public discourse is best served not by arithmetic performed with a shrinking yardstick, but by evidence, context and intellectual honesty. Only then can Nigerians have the informed conversation that the country’s economic future deserves.
*Tanimu Yakubu is Director-General, Budget Office of the Federation
