The CFG Advisory has called on the Central Bank of Nigeria to take urgent, growth-focused measures in response to the nation’s slowing economy and rising debt.

With Nigeria’s debt profile exceeding $100bn and significant debt servicing obligations, the investment firm, in an update on Monday, warned that excessive government borrowing is crowding out private sector credit and discouraging foreign direct investment.

The latest Capital Importation Report from the National Bureau of Statistics indicated that FDI into Nigeria dropped sharply by 70.06 per cent quarter-on-quarter to $126.29m in the first quarter of 2025, down from $421.88m recorded in the final quarter of 2024.

The dip in FDI was recorded despite an overall increase in capital importation, indicating that foreign investors are favouring short-term, high-yield financial instruments over long-term, productive commitments in the Nigerian economy.

The data showed that FDI made up only 2.24 per cent of total capital imported into the country in Q1 2025, down from 8.29 per cent in the preceding quarter and below the 3.53 per cent recorded in Q1 2024.

On a year-on-year basis, FDI grew by 5.97 per cent to $119.18m.

According to the update, while the economy has recorded improved foreign exchange rates and a slight decline in inflation, growth has slipped from 3.8 per cent in Q4 2024 to 3.1 per cent in Q1 2025.

CFG Advisory stressed that stability alone is not enough without a clear plan to accelerate expansion.

“The CFG Advisory has issued a strong appeal to the Central Bank of Nigeria to take definitive action in response to Nigeria’s economic situation. With a debt profile above $100bn and significant debt service costs, the country needs proactive strategies to boost growth.

“Nigeria’s debt profile is above $100bn, with significant debt service costs. However, there are no threats of default, and funding is primarily through market securities, as well as ways and means financing from the CBN, since it has been discontinued. Excessive borrowing is crowding out private sector credit and discouraging foreign direct investment,” said the update.

Recommendations made by the firm include targeted reduction of interest rates by the end of Q3 2025 to boost growth and tackle inflationary pressures and sale of oil JV assets to raise $35-$40bn, thus reducing debt and enhancing the balance sheet, and strengthening investment in non-oil exports, particularly in agriculture, to drive growth.

CFG Advisory also urged the CBN to commence its inflation targeting programme immediately with an average target of an inflation rate around 12-14 per cent, which it projected to elevate economic growth to 8-10 per cent based on historical data.

In conclusion, CBN recommended structural reforms, strategic fiscal management, and a coordinated approach to monetary, fiscal, trade, investment and industrial policy implementation to stimulate economic growth at 8-10 per cent sustainable levels;

“Implementing these measures will restore purchasing power and lift Nigerians out of poverty,” said the update.