Economist: Nigeria Can Lower Inflation To 5% By 2025 With $50 Billion In Foreign Investment

Ayo Teriba, CEO of Economic Associates (EA), asserts that Nigeria can reduce its inflation rate to 5% by 2025 if the federal government successfully attracts $50 billion in foreign direct investment (FDI).

Speaking on Arise TV’s Good Morning Show, Teriba highlights that such a significant inflow of investment would strengthen the naira, stabilize exchange rates, and improve key macroeconomic indicators, which are currently exacerbating inflationary pressures in the country.

Teriba believes that achieving a 5% inflation rate is realistic if the government adopts bold reforms to attract foreign capital. Drawing from recent developments in Argentina, he explains that with proper policies in place—especially in tax, finance, and investment—Nigeria could secure the necessary foreign investments to bring inflation down to single digits. “Inflation can drop to single digits if the government brings in $50 billion in FDI next year,” Teriba states.

However, he cautions that Nigeria’s current economic policies, particularly those focused on servicing existing debt, hinder the country’s ability to reach this target. He argues that borrowing to pay off past debt is an inefficient and unsustainable strategy. “The interest rates on Nigeria’s foreign debt are among the highest globally due to its poor credit rating, which makes borrowing an unfeasible long-term solution,” Teriba explains.

He advocates for a shift from debt-based financing to equity-based strategies. He notes that countries with similar economic profiles to Nigeria can borrow at much lower interest rates by issuing higher-quality debt instruments. “Nigeria must stop funding its fiscal deficits with debt. A country with a healthy balance sheet should prioritize equity financing,” Teriba emphasizes.

Teriba urges the government to implement a robust investment strategy focused on structural reforms and incentives to attract foreign investment. Without these efforts, he warns that inflation will continue to pose a threat to economic stability.

“Without significant reforms and foreign capital inflows, Nigeria risks missing the opportunity to stabilize its economy and achieve growth,” he concludes.