Nigeria needs right policies to sustain economic growth

Nigeria has experienced significant economic hardships over the last 18 months due to the reforms implemented, particularly in the areas of foreign exchange and fuel subsidy removal. Tilewa Adebajo, the CEO of CFG Advisory, emphasized the need for the country to establish the right policies to sustain economic growth at a sustainable level. In an interview with CNBC Africa at the RMB Nigeria Economic Forum, Adebajo highlighted the importance of optimizing equity by selling off assets and improving liquidity to address the current financial challenges facing Nigeria. Adebajo noted that the government's current liabilities exceed their assets, leading to a cumulative deficit of nearly $36 trillion in the last two years. To address this financial imbalance, Adebajo suggested that the government should consider selling joint venture assets to raise funds amounting to $35 to $40 billion. These funds could then be used to enhance the country's debt profile and improve liquidity. The high debt levels, currently standing at $150 trillion, are no longer sustainable, with a significant portion of the budget allocated to debt servicing instead of productive investments. Adebajo stressed the need for a more efficient debt management strategy to support economic reforms and ensure sustainable growth. Furthermore, Adebajo advocated for a reevaluation of Nigeria's industrial policies to promote local production and reduce dependence on imports. He highlighted the need to address the importation of goods from China, which he believes is undermining Nigeria's industrial sector. Adebajo pointed out that while Nigeria has made progress in certain industries such as cement, fertilizers, and refining, there are still areas like sugar production where import dependency persists. By supporting local farmers to supply sugar refineries within the country, the government can stimulate employment, enhance productivity, and bridge the output gap. Adebajo's insights underscore the necessity of implementing targeted policies to drive economic growth in Nigeria and mitigate the challenges posed by recent reforms. As the country navigates these economic complexities, strategic reforms and initiatives will be crucial in ensuring long-term sustainability and resilience in Nigeria's economy.