CFG Advisory: Nigeria has to revamp trade, industrial policies

Nigeria, with its 200 million strong population, aims to achieve a Trillion Dollar Economy by revamping its trade and industrial policies, according to Tilewa Adebajo, the CEO of CFG Advisory. During a recent interview, Adebajo highlighted the need for the country to address its output gap and boost its growth rate. Despite a 3.4% GDP growth, Adebajo believes it falls short for a country of Nigeria's size and potential. He emphasized the importance of sustainable double-digit growth, citing the abundance of human resources, a young population, and natural resources like oil and gas. Adebajo also acknowledged the stability achieved in the economy, particularly in key cost push factors like the exchange rate and fuel subsidy removal. He noted the importance of stability in encouraging growth and investment in the country. The interview delved into the challenges in the manufacturing sector, which saw only a 4% nominal GDP growth in 2024. Adebajo highlighted the need for a revamped industrial policy to reduce reliance on imports and boost local manufacturing. He emphasized the importance of setting up policies to support sectors like agriculture, manufacturing, and investment in order to increase productivity and output. Adebajo pointed out successful examples in industries like cement, fertilizer, and refinery, urging the government to create incentives to attract more investments in key sectors. He stressed the need for deliberate policy pronouncements and incentives to drive growth and productivity in the economy. The interview also touched on fiscal stability, with Adebajo raising concerns about Nigeria's rising debt levels and the need to optimize equity within the country's capital structure. He recommended selling down some JV assets to reduce debt levels and create a base for productivity. Adebajo expressed optimism about the oil industry's growth potential, urging reinvestment of oil revenues into other sectors to diversify the economy. The discussion concluded with Adebajo sharing his growth forecast, suggesting that with the right policies in place, Nigeria could achieve over 6-7% growth this year. However, without significant policy changes, growth may remain around 4-4.5%. Adebajo emphasized the need for proactive policy decisions to drive economic growth and prosperity in Nigeria.