Nigeria has suffered a severe economic blow, losing an estimated $300 billion in Gross Domestic Product (GDP) over the past eight years.
Tilewa Adebajo, CEO of CFG Advisory, disclosed this alarming figure in the firm’s 2025 economic forecast. He attributed the decline to policy inconsistencies and poorly implemented reforms, which have led to a crippling 300 percent devaluation of the naira.
Adebajo noted that the nation’s GDP now stands at $200 billion, placing Nigeria as the fourth-largest economy in Africa, behind Egypt, South Africa, and Algeria. “The macroeconomic situation has deteriorated significantly,” he stated. “Nigeria’s devaluation, low productivity, and stagflation have resulted in a loss of over $300 billion in value.”
Nigeria’s 18-month economic reform program has delivered mixed results, largely due to poor execution and misplaced priorities. The most significant impact has been the devaluation of the naira from 450 to over 1,700 per US dollar. Combined with the removal of fuel subsidies, these reforms have led to higher inflation, reduced purchasing power, and soaring interest rates.
The social intervention programs meant to cushion the effects of these changes have fallen short, failing to provide meaningful relief to households and businesses. Meanwhile, the country’s borrowing has surged, exceeding $100 billion, with debt servicing costs skyrocketing from ₦8 trillion in 2024 to ₦16.3 trillion in the 2025 budget. Alarmingly, debt servicing now surpasses combined allocations for defense, infrastructure, education, health, and security, totaling ₦14 trillion.
Missed Opportunities and Policy Gaps.
Rather than reinvesting savings from subsidy removal into capital projects to stimulate growth, the funds have been channeled into debt servicing. Additionally, money supply has risen by 50 percent year-on-year, peaking at a historic ₦108 trillion, undermining the Central Bank of Nigeria’s (CBN) ability to control inflation.
Foreign direct investment (FDI) is at an all-time low, with just $29 million recorded in the first half of 2024. The power sector remains underdeveloped, with inadequate transmission and distribution infrastructure hampering industrial productivity.
The report projects a downward inflation trajectory to 22 percent by the end of 2025, with interest rate cuts to below 20 percent by Q1 2026. However, the naira’s value could swing dramatically—either stabilising below ₦1,000/$ or worsening beyond ₦2,000/$—depending on how the government manages debt, oil production, and asset sales.
Nigeria remains mired in stagflation, with economic reforms yet to achieve sustainable growth. The failure of social intervention programs, coupled with rising debt and inflation, has deepened the economic crisis. Without sincere and coordinated policy execution, the country risks further economic decline.
As Adebajo summarized: “The government must align monetary, fiscal, trade, and investment policies to steer the economy out of this quagmire. Anything short of this will perpetuate Nigeria’s economic challenges.”
To reverse this economic decline, Adebajo stressed the need for decisive action. The federal government must: Reduce the national debt and restore Nigeria’s credit rating to investment grade; Implement structural reforms to improve productivity and encourage investment; Leverage oil assets by selling joint venture stakes, potentially raising $30–50 billion to ease the debt burden and stabilise the foreign exchange market; Boost oil production and attract investments akin to the $22 billion recorded in 2009 and 2014.
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