The federal government has sounded an alarm over the risk of Nigeria’s inflation rate climbing to 20 percent if global crude oil prices remain at current elevated levels, with the Chief Economic Adviser to the President warning that the same oil price surge generating additional government revenue could simultaneously erode its real value through accelerating consumer price increases.
Dr. Tope Fasua delivered the warning while presenting an assessment of Nigeria’s economic environment in 2026 and beyond at the monthly breakfast session of the Nigeria-South Africa Chamber of Commerce in Lagos, cautioning against complacency about the current revenue windfall from higher crude prices.
“If this crude oil price does not come down, this inflation may hit up to 20 percent,” Fasua said, adding that inflation had already begun to tick upward again and that the risk of price erosion undermining oil-driven revenue gains was real and immediate.
On the broader fiscal framework, Fasua argued for a significantly expanded national budget, envisioning a N100 trillion budget as the appropriate scale for addressing Nigeria’s infrastructure deficit. He described debt not as a problem to be avoided but as a tool to be used strategically, arguing that the real issue was underfinancing rather than excessive borrowing.
He specifically called on state governors who had boasted of avoiding debt to reconsider their position, arguing that a refusal to borrow for transformative infrastructure was not fiscal prudence but a failure of developmental ambition. “It is simplistic from a treasury management perspective. If you are not borrowing, that also means the government did not think about the kind of transformative infrastructure that could happen in that state,” he said.
Fasua disclosed that the federal government had conducted an upward revision of its revenue expectations for the year based on substantially improved inflows from the Nigeria Revenue Service and Customs, driven by the tax reform programme. He said crude oil revenue had become a secondary rather than primary contributor to federal income, noting that Nigeria’s beneficial share of each crude barrel amounted to approximately 35 to 40 percent of the gross value after accounting for production costs and sharing arrangements.
