Nigeria needs $47.6bn annually to sustain reform gains – NESG

Nigeria must mobilise an estimated $47.6 billion annually to finance its transition from economic stabilisation to sustainable growth, according to a new report by the Nigerian Economic Summit Group (NESG), which warns that recent reforms could unravel without large-scale investment and stronger institutional coordination.

The report, titled *Financing Nigeria’s Consolidation Phase for Growth*, said the country has entered a critical consolidation phase following major market-oriented reforms, including exchange rate unification and the removal of petrol subsidies. While these measures have corrected longstanding distortions, the NESG argued that stabilisation alone would not guarantee long-term economic prosperity.

“Consolidation represents the medium-term phase of economic management that succeeds stabilisation,” the report stated, noting that the next stage requires sustained investment, institutional strengthening, productivity growth and structural transformation to translate recent reforms into durable economic gains.

According to the report, Nigeria’s biggest challenge is not a lack of capital but the absence of a credible framework for mobilising, de-risking and efficiently allocating financial resources toward productive sectors.

To address this, the NESG proposed the creation of a National Consolidation Financing Framework (NCFF) to channel domestic and international capital into infrastructure, manufacturing, agriculture and social development.

The think tank estimated that Nigeria faces an annual financing gap of about $31.5 billion if it is to achieve the Sustainable Development Goals by 2030. Infrastructure, industry and innovation account for the largest share of the investment requirement, requiring approximately $19.6 billion annually.

Despite signs of macroeconomic improvement, the report highlighted lingering vulnerabilities. Inflation, which declined after the rebasing of the consumer price index, has started to edge higher again, rising from 15.0 percent in February to 15.7 percent in April 2026, driven largely by higher domestic fuel prices linked to geopolitical tensions in the Middle East. Food inflation accelerated even more sharply, climbing from 8.9 percent in January to 16.1 percent in April.

Read also: NESG warns Nigeria’s debt crisis persists despite signs of stability

Nigeria’s public debt also increased from N144.7 trillion in 2024 to N159.3 trillion in 2025, reflecting continued reliance on borrowing to finance fiscal deficits. Rising debt-service obligations are limiting fiscal flexibility and increasing concerns about medium-term debt sustainability, the report noted.

The NESG identified four pillars that should underpin Nigeria’s consolidation agenda: macroeconomic stability, strong institutions, structural transformation and social inclusion. While progress has been recorded in exchange-rate stability and inflation management, significant gaps remain in infrastructure, manufacturing competitiveness, governance and poverty reduction.

The report expressed concern over Nigeria’s weak structural transformation, noting that manufacturing’s contribution to GDP has fallen from 20 percent in 1995 to 8.7 percent in 2024. At the same time, economic activity has shifted largely into low-productivity service sectors, limiting the economy’s ability to generate quality jobs and boost exports.

Power shortages remain a major constraint on industrial growth. Average electricity generation stood at 5,398 megawatts in 2025, far below the country’s installed capacity of 13,625 megawatts, resulting in a plant availability factor of just 39.6 percent. The report said inadequate power supply, limited access to affordable financing and dependence on imported inputs continue to undermine manufacturing productivity.

On social outcomes, the NESG noted that poverty has worsened despite recent economic growth. The poverty rate rose from 51 percent in 2022 to 63 percent in 2025, highlighting the weak link between growth and improved living standards. Social protection coverage also remains limited, with only a small proportion of Nigerians benefiting from formal safety-net programmes.

To bridge financing gaps, the report recommended leveraging public-private partnerships, blended finance, infrastructure debt funds, diaspora bonds and pension fund investments. It also proposed innovative financing instruments such as green industrial bonds, a manufacturing catalytic facility and diaspora social impact bonds to support key sectors.

Drawing lessons from Malaysia’s economic transformation, the NESG argued that sustained growth depends on strong institutions, policy consistency, domestic capital mobilisation and coordinated infrastructure investment.

The report urged Nigerian policymakers to strengthen revenue mobilisation, improve regulatory quality, expand social protection and accelerate investments in power, transport and industrial development.

“The transition from stabilisation to consolidation presents a narrow but critical opportunity window,” the report added, stressing that disciplined investment execution and effective financing mechanisms will determine whether Nigeria can transform recent reforms into broad-based and sustainable economic growth.