1 week Ago By Ayobamiji Komolafe
A former President of the Nigerian Bar Association, Olisa Agbakoba (SAN), has said that for Nigeria to succeed, it must embrace innovation and efficiency in order to create a N500 trillion budget for 2026/2027. He emphasized the need for a comprehensive strategy that would transform Nigeria’s economy from a resource-dependent model into a diversified, production-oriented powerhouse. According to him, achieving the ambitious N500 trillion budget target demands a fundamental re-imagining of Nigeria’s economic architecture and governance systems to address unsustainable debt levels and significantly boost revenue generation.
Agbakoba, who is the Senior Partner at Olisa Agbakoba Legal (OAL), spoke in Lagos on Wednesday during the presentation of a policy report titled, “OAL Governance and Economic Analysis and Forecast 2025: Nigeria Can Succeed Rather Than Fail – Innovation and Efficiency to Create a N500 Trillion Budget for 2026; Implication for the Moving Parts in a New World Trade Order.” He said that Nigeria’s economic underperformance stems largely from extractive institutions that concentrate power and wealth among elites. He argued that true and lasting prosperity can only be achieved through inclusive institutions that broadly distribute economic and political power.
According to him, Nigeria’s transformation must begin with a restructuring of its governance system. This involves devolving powers to States and Local governments, reforming the constitution to reflect true federalism, ensuring judicial independence, modernizing the legal system, implementing anti-corruption measures, and reforming the public service. Agbakoba explained that strategic interventions across multiple sectors could unlock over N500 trillion in economic value.
He revealed potential revenue gains from oil and gas reforms, tax restructuring, asset monetization through the Ministry of Finance Incorporated (MOFI), development of critical minerals, reforms to unlock dead capital via property rights, and the expansion of the blue economy, aviation, and digital sectors. He also noted the potential economic impact of enforcing local content requirements, adopting strategic trade policies, and exploring the space industry. He stressed that implementation must be carried out at “Trumpian speed,” characterized by decisive and concurrent actions across various fronts, focused governance, streamlined bureaucracy, and aggressive use of technology to fast-track outcomes.
Agbakoba emphasized that the success of these economic policies should not be measured by macroeconomic statistics or international commendations, but by tangible improvements in the lives of everyday Nigerians. He posed questions such as whether the market trader in Onitsha has more disposable income, if food has become more affordable for the factory worker in Kano, if the farmer in Benue has access to better healthcare and education, and whether the office worker in Lagos can see a clear path to a better future. He said that with Nigeria’s rapidly growing population, intensifying climate impacts, increasing global competition, and an unsustainable debt burden, the country must seize the momentum of recent reforms to build inclusive institutions that promote shared prosperity.
Agbakoba noted that Nigeria stands at a crucial economic crossroads in 2025. He acknowledged positive signs of recovery in the economy, citing a fourth-quarter GDP growth of 3.84% in 2024 which was the fastest in three years and largely driven by the services sector.
This, he said, followed growth rates of 2.98% in Q1 and 3.19% in Q2 2024, signaling a shift from economic stagnation to recovery.
He credited recent economic reforms for this progress, despite their short-term hardships. These reforms include the removal of fuel subsidies, which has redirected funds to more productive sectors; exchange rate unification, which has reduced arbitrage opportunities and brought greater transparency; and tax system reforms, which are closing loopholes and simplifying tax administration. He also praised the establishment of the Nigeria Consumer Credit Corporation (CREDICORP), calling it a major step toward enabling access to consumer credit.
He said these initiatives have helped stabilize inflation and strengthen the naira. He pointed out that investor confidence has improved, with the naira appreciating by over 7% since November 2023 and local bonds offering yields of up to 25%. Experts in Q2 2024 projected the naira could strengthen below N1,000 to the dollar, making it the world’s best-performing currency at the time.
Despite these improvements, Agbakoba warned that Nigeria still lags behind its economic potential. He said the Central Bank of Nigeria projects GDP growth of 4.17% in 2025, attributed to ongoing reforms and expected increases in oil production.
However, he maintained that this growth rate is insufficient to meet Nigeria’s developmental needs or deliver widespread prosperity. He added that while Nigeria’s fiscal deficit declined from 6.2% of GDP in the first half of the previous year to 4.
4% in the same period of 2024, inflation remained high at an average of 33.2%, largely due to climate challenges and soaring food prices. Over 33 million Nigerians are now food insecure, he said, highlighting that macroeconomic gains have not yet translated into improved quality of life for many citizens.
Agbakoba described Nigeria’s debt burden as a serious threat to sustainable growth. He noted that by mid-2024, the country’s debt service-to-revenue ratio had surged to 162%, up from 128% in 2023, meaning Nigeria is spending far more on debt servicing than it earns. He said the country spent N6.
04 trillion on debt servicing in the first half of 2024 a 69% increase from the previous year and that debt servicing now accounts for 50% of total government spending, exceeding retained revenue. He identified several key factors behind this crisis, including the depreciation of the naira, which has increased the cost of servicing foreign-denominated debt, high borrowing costs driven by rising interest rates and increased government borrowing, and persistent revenue constraints despite subsidy removals and tax reforms. He further revealed that Nigeria’s total public debt rose to N134.
3 trillion by mid-2024, up from N121.7 trillion in Q1. While the debt-to-GDP ratio remains below the IMF’s 60% threshold for emerging markets at around 58%, he cautioned that the more pressing issue is Nigeria’s debt-to-revenue ratio, which places the country among the most vulnerable globally in terms of debt sustainability.
Agbakoba asserted that Nigeria’s debt crisis is a symptom of deeper institutional weaknesses, and that to secure its economic future, the country must address the fundamental issues that have prevented it from achieving prosperity, despite its vast resources and potential..
