NESG Warns Of Escalating Fiscal Deficit, Seeks Urgent Structural Reforms

The Nigerian Economic Summit Group (NESG) has raised alarm over the country’s widening fiscal deficit, warning that without urgent structural reforms, Nigeria’s debt sustainability, currency stability, and long-term growth prospects could be at serious risk.
In its mid-year 2025 economic outlook, the private-sector think tank projected that Nigeria’s fiscal deficit could exceed ₦16 trillion by the end of the year, far above the ₦9.18 trillion budgeted driven by soaring debt service obligations, fuel subsidy costs, and underwhelming oil revenues.
“Debt service alone may gulp over ₦11 trillion in 2025, representing more than 65 per cent of total revenue.With oil production still below targets and non-oil revenue mobilisation weak, the government risks financing this gap through inflationary central bank overdrafts or unsustainable borrowing,” the NESG said.
It warned that failure to address structural bottlenecks particularly around subsidy removal, inefficient SOEs, and poor public expenditure efficiency, could stall macroeconomic recovery, derail investor confidence, and worsen social vulnerabilities.
The group also cited the sharp depreciation of the naira, which has pushed inflation above 32 per cent, eroded household purchasing power, and raised business input costs, adding further strain to the economy.
It urged the federal government to implement aggressive reforms in public financial management, widen the tax base without overburdening existing payers, and prioritise spending towards infrastructure, health, and education.
The statement comes as Nigeria grapples with IMF and World Bank pressure to cut spending, raise revenue, and deepen fiscal transparency under the $3billion SAF financing framework.