Tilewa Adebajo, the Chief Executive Officer of CFG Advisory, stressed the necessity for Nigeria to broaden its revenue streams in order to combat the prevailing inflation challenge.
Adebajo emphasized the urgency of diversification to bolster the government’s financial capacity and foster economic growth.
“Addressing inflation requires a multifaceted approach. We can’t solely focus on inflation rates; we must examine its impact on interest rates and GDP growth,” Adebajo stated, highlighting the interconnection of economic factors. He drew attention to the historical inverse correlation between inflation and GDP growth in Nigeria, substantiating the need for a balanced approach.
Adebajo’s analysis underscored the significance of investing in critical infrastructure, particularly the power sector, as a linchpin for national progress. He pointed out that Nigeria’s debt service allocation constrains recurrent expenditure, emphasizing the imperative to broaden the revenue base beyond reliance on oil.
“Government lacks the resources for infrastructural investment. Private sector involvement and foreign direct investment are paramount. Concessions and leveraging existing assets can substantially boost revenue,” Adebajo stated, advocating the role for the private sector in driving infrastructure development during an interview with ARISE NEWS on Friday.
Expressing approval of Finance Minister Wale Edun’s stance against further borrowing, Adebajo highlighted the stark reality of Nigeria’s debt situation.
He accentuated the difference between debt-to-GDP ratios and the alarming percentage of revenue dedicated to debt service, asserting the unsustainability of the current trajectory.
Adebajo’s insights call for a strategic shift in Nigeria’s economic approach, emphasizing a blend of private sector partnerships, diversified revenue sources, and prudent debt management as key to surmounting the inflationary challenges and driving sustainable economic growth.