Experts have charged the federal government to make efforts at reducing its debt burden to cut its borrowing costs as well as stimulate investments, growth and development in the country.
This was stated by the chief executive officer(CEO) of CFG Advisory, Tilewa Adebajo, in the company’s 2025 Economic Forecast, titled: ‘From Reform Fatigue Quagmire to Sustainable Growth.’
According to him, to revive the economy, the government must work on reducing its debt burden to be able to restore its credit rating to investment grade, and curb inflation. He explained that these measures would lower borrowing costs, stimulate investment, and drive sustainable growth, productivity, and employment.
“To get the economy back on track, the government must reduce its debt burden, restore its credit rating to investment grade and tame inflation. This would reduce borrowing costs and provide stimulus for investment, sustainable growth, productivity, and employment,” he stressed.
Adebajo also stated the need to restructure the government’s capital structure and balance sheet, saying, “Selling down its JV oil assets will raise $30-50 billion, that can be applied to reduce the debt burden, improve the foreign exchange regime, provide dollar supply for naira appreciation, restore credit rating and boost net reserves.
“We see another year of high interest rates with inflation trajectory downwards to about 22 per cent by year end, with effective rate cuts to sub 20 per cent by Q1 2026.”
He added that the naira position could remain around N1,000 to the dollar or almost N2000 to the dollar, depending on how government manages its debt profile, boost oil production and asset sales.
On the 2025 budget, he said, for it to be successful, the government must work on its economic policies and reform strategies. ‘The sincerity and commitment to a coordinated monetary, fiscal, trade, industry and investment policy execution, the decisive factor,’ he said.
He noted that, the Nigeria’s 18-month economic reform programme has yielded mixed results, largely due to poor implementation and putting the cart before the horse. “The programme’s biggest impact on the economy has been the devaluation of the naira from about N450-N1700Naira to the dollar.
“The cost push effect of fuel subsidy removal worsened the situation in an economy already in stagflation with sharp increases in inflation trajectory. This led to reduced household purchasing power and higher interest rates for the firms and the economy. The social intervention program has also not made any impact failing to provide succour,” he noted.
Commenting on the state of the country’s economy, he said, the economy still deep in Stagflation, after 18 months of reforms failing to achieve a sustainable growth trajectory.
To him, “Reform Fatigue has led to an Economic Quagmire. The government put the cart before the horse with implementation. The outcome is a 300 per cent currency devaluation, debt in excess $100 billion, and an economy deep in stagflation. Households and firms are bearing the brunt of the reforms, with low purchasing power, low productivity, high interest rates and unfavourable exchange rates.”
It also noted that ,social intervention programs to cushion the effects have failed and mired in corruption.
“FDI at all-time lows of under $29 million in H1 2024.Power transmission and distribution infrastructure still very poor, negatively impacting industrial productivity and economic growth.
“Plans to rebase GDP and CPI is of particular concern. Rebased unemployment numbers do not reflect the reality and concerns with sub optimal budget performance, fiscal and debt management as three deficit budgets now running concurrently. Three years cumulative deficit of N36.07 trillion and 2025 budget allocation of N16.3 trillion for debt servicing is a bright red flag,” he pointed out.
