Adebajo: FG Must Reduce Debt Burden, Restore Credit Rating to Investment Grade

Nume Ekeghe

The Chief Executive Officer of CFG Advisory, Tilewa Adebajo, has emphasised that to revive the economy, the government must prioritise reducing its debt burden, restore its credit rating to investment grade and curb inflation.

According to Adebajo, these measures would lower borrowing costs, stimulate investment, and drive sustainable growth, productivity, and employment.

He stated this in CFG’s Nigeria’s 2025 Economic Forecast, titled, “From Reform Fatigue Quagmire to Sustainable Growth.”

He stated: “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. To accomplish this, FGN must restructure its capital structure and balance sheet. 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 be sub-1000/$ or north of 2000/$ depending on how government manages its debt profile, boost oil production and asset sales.

Furthermore, on the 2025 budget, he stated: “Ultimately, the success of this budget cycle, economic policies and reform strategies rests with the FGN. The sincerity and commitment to a coordinated monetary, fiscal, trade, industry and investment policy execution, the decisive factor.”

He stressed that the Nigeria’s 18-month economic reform program has yielded mixed results, largely due to poor implementation and putting the cart before the horse.

He said, “The program’s biggest impact on the economy has been the devaluation of the naira from about 450-1700Naira/$. 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”