High inflation, interest rate hike compounding debt serving costs – Adedipe
An economist has said that high inflation rate and associated increase in interest rates are further compounding debt serving costs, straining public finance.
The founder and Chief consultant of B.AdedipeAssociates Ltd, Dr ‘Biodun Adedipe who made this statement in Lagos at the 2025 economic review and outlook conference, organised by Lagos Chamber of Commerce and Industry said that government needs to expand non- oil revenue.
He said devaluation of the naira and rising import costs will contribute to inflationary pressures as Nigeria remains import-dependent for many goods particularly food and energy.
He listed high debt service, revenue ratio, low revenue generation to gross domestic product GDP, significant budget deficit with planned borrowing of N9.22 trillion as major fiscal challenges in 2025 financial year.
In his presentation tagged “Nigeria 2025; Path to Economic Rebound and Recovery, The issues,the drivers and the expectations, he said that the Country needs to expand agricultural export, tax reform as well as improved tax compliance to increase the country non-oil revenue.
Expressing the need for continuing intervention in critical production sectors, he said enhanced coordination between fiscal and monetary authorities should lead to more stable economic outcomes.
He said continuous monetary tightening but complement with supply side interventions to address core inflation drivers such as food production and improved energy supply.
He said the key drivers this year include sustained deep reform especially tax will enhance global competitiveness and ease of doing business, plug leakages and shrink the space for economic rent.
Stating the expectation in 2025, he said inflation expected to reach an inflection point in the early part of this year, causing a potential downward trajectory of Monetary policy rate (MPR).
He pointed out that the tightening by CBN, effects of tax reform if implemented and supply side bottleneck issues tamed should result in a reduction in inflation rate.
