Nigeria’s $1tn economy target a mirage without deep reforms – CFG Advisory chief warns

Nigeria’s ambition of building a $1 trillion economy by 2030 is unrealistic without far-reaching structural reforms that drive productivity, expand purchasing power and restore fiscal sustainability, the Chief Executive Officer of CFG Advisory, Mr Tilewa Adebajo, has warned.

Adebajo made this position known on Tuesday at the monthly forum of the Finance Correspondents Association of Nigeria (FICAN) in Lagos, where CFG Advisory unveiled its 2026 economic forecast titled “The Urgency of Now – Reforms Lead to Productivity-Led Growth.”

While acknowledging the Central Bank of Nigeria’s (CBN) push for a $1 trillion economy through policies such as banking sector recapitalisation, Adebajo dismissed the target as largely aspirational under current conditions. According to him, Nigeria’s economy would need to grow at least five times its present rate on a sustained basis to realistically attain such a milestone.

“Nigeria’s trillion-dollar ambition will remain a slogan unless it is backed by deliberate, coordinated and productivity-driven growth strategies,” Adebajo said. “The country has the potential to become a $2 trillion or even $3 trillion economy, but only if it breaks away from its long-standing cycle of policy inconsistency, macroeconomic instability and weak capital investment.”

He noted that if the country had sustained its 2014 growth trajectory, it would have achieved the $1 trillion economy feat, but regretted that that has not been the case.

Adebajo recalled that Nigeria had previously come close to economic scale, with GDP peaking near $700 billion, noting that consistent annual additions of $20 billion to $50 billion could have pushed the economy beyond the $1 trillion mark. “The problem has never been potential; it has been momentum,” he added, pointing to repeated episodes of growth followed by reversals.

Subsidy gains swallowed by debt

The CFG Advisory boss warned that the fiscal gains from the removal of petrol subsidy have been almost entirely absorbed by debt servicing, leaving the Federal Government with little capacity to fund development projects or deliver meaningful social interventions.

“The entire benefit of fuel subsidy removal is now being absorbed by debt service,” Adebajo said. “This neutralises the reform narrative around subsidy removal and raises serious questions about fiscal sustainability.”

Nigeria’s public debt, now estimated at over $100 billion, has reached what CFG describes as unsustainable levels. According to the firm, nearly 60 per cent of government revenues are now devoted to servicing debt, severely constraining spending on infrastructure, education, health and social protection.

This concern is reflected in the proposed 2026 budget, which allocates N15.52 trillion to debt servicing – more than the combined allocations to defence, security, education and health, which stand at N14.97 trillion.

“When debt service alone exceeds what you spend on education, health and security combined, it is a clear signal of fiscal stress,” Adebajo said.

Stagflation risks and reform fatigue

He noted that despite some macroeconomic stabilisation, such as decelerating inflation, improved foreign exchange transparency and the end of ways-and-means financing, the economy remains trapped in stagflation.

“The economy is showing classic signs of stagflation: high costs, weak growth and fragile confidence,” Adebajo said. He added that excessive fiscal spending, persistent budget deficits and the weak impact of social intervention programmes have heightened frustration among households and businesses.

He warned that reform fatigue is setting in, stressing that reforms alone cannot pull the economy out of stagnation without a coordinated growth strategy that aligns fiscal, monetary, trade and industrial policies.

“Now that some stability has been achieved, reforms must have a human face,” he said, calling for the restoration of effective social intervention programmes to cushion the impact of adjustment on ordinary Nigerians.

Capital spending gap and global warnings

Adebajo criticised the persistent underfunding of capital expenditure, describing it as a major structural weakness. According to him, capital budgets, historically key drivers of growth, have been crowded out by recurrent spending and debt obligations over the past two years.

Adebajo also referenced warnings from the World Bank and the International Monetary Fund over Nigeria’s rapid budget expansion, estimated at about 56 per cent year-on-year, urging closer alignment with realistic revenue projections.

“When budgets grow far faster than revenues, the gap is inevitably filled with debt,” he noted.

Asset sales and balance sheet reset

To address rising debt levels and shrinking fiscal space, he called for a decisive shift in fiscal strategy anchored on large-scale asset sales, privatisation and concessions.

Adebajo recommended that the Federal Government sell down to at least 49 per cent of its interests in 74 licensed concession assets, a move it said could raise up to $50 billion. The proceeds, according to him, should be used to reduce debt, improve government finances and recapitalise the Nigerian National Petroleum Company Limited (NNPC).

“Continued borrowing is no longer sustainable,” Adebajo said. “Optimising government assets is a more credible way to reset the balance sheet.”

CFG boss also urged the consolidation of NNPC’s oil forward contracts into a structured debt instrument to improve transparency, accountability and financing terms, arguing that a stronger NNPC balance sheet is critical to Nigeria’s broader fiscal health.

Reviving oil, gas and investment

The advisory firm CEO linked fiscal reform to the urgent need to revive investment in the oil and gas sector, which has collapsed from over $22 billion in peak years to less than $3 billion in 2024. He noted that with improved security, regulatory clarity and fiscal discipline, Nigeria could ramp up production to 2.5 million barrels per day, boosting revenues and foreign exchange inflows.

Despite the challenges, he projected GDP growth of about 5 per cent in 2026, alongside single-digit inflation, a benchmark interest rate below 20 per cent and an exchange rate of between N1,400 and N1,500 per dollar.