By NIyi Jacobs
Nigeria’s ambitious economic reform program, spanning 18 months, has exacerbated the nation’s economic woes, analysts have revealed.
A recent report by CFG Advisory, titled “Nigeria’s 2025 Economic Forecast: From Reform Fatigue Quagmire to Sustainable Growth,” highlights how the reforms, including naira devaluation and fuel subsidy removal, have led to severe economic dislocations.
BusinessNG reports that the naira’s value has dropped dramatically, plummeting from ₦450 to ₦1,750 per US dollar, triggering inflationary spikes and eroding household purchasing power. Higher borrowing costs for businesses have further compounded economic challenges.
Social intervention measures, intended to soften these impacts, have failed to deliver relief. Meanwhile, government borrowing has surged past $100 billion, with debt servicing costs projected to double from ₦8 trillion in 2024 to ₦16.3 trillion in 2025. This figure surpasses the combined allocations for critical sectors such as defense, education, health, and infrastructure, pegged at ₦14 trillion.
Rather than leveraging the savings from subsidy removal for growth-driven capital projects, funds have been directed toward unsustainable debt servicing. Inflationary pressures have intensified due to a 50% year-on-year rise in money supply to ₦108 trillion, undermining Central Bank efforts to curb inflation.
The report also notes Nigeria’s declining GDP, now $195 billion, a stark contrast to its peak of over $500 billion a decade ago. Once Africa’s largest economy, Nigeria now ranks fourth, trailing South Africa, Egypt, and Algeria.
Analysts suggest selling joint venture oil assets, which could raise $30–$50 billion to reduce the debt burden, stabilize the naira, and boost reserves. Coordinated monetary and fiscal policies, alongside restoring Nigeria’s credit rating, are critical for recovery.
While inflation is projected to ease to 22% by the end of 2025, the naira’s future—whether it strengthens below ₦1,000/$ or worsens beyond ₦2,000/$—depends on decisive actions by the federal government.
The report concludes with a warning: without sincere and coordinated reforms, Nigeria risks deepening its economic struggles and losing opportunities for sustainable growth. The road to recovery, it argues, lies in disciplined governance and a unified approach to fiscal and monetary policies
