Pan-African Credit Rating Agency, Agusto & Co, has said that increased crude oil production can help Nigeria resolve the twin challenges of inflation and volatility in the foreign exchange market.
This was disclosed by Jimi Ogbobine, Head of Agusto Consulting, a subsidiary of Agusto & Co, during his presentation at the 2025 Economic Roundtable to discuss Nigeria’s economic trajectory, held recently in Lagos.
The event held in honour of its founder, the late Olabode Agusto, provided an in-depth analysis of trends, policy developments, and investment opportunities shaping Nigeria’s economic landscape.
Discussions explored banking, finance, manufacturing, energy, and regulatory reforms critical to business and investment growth in 2025.
Analysing the Nigerian economy, Ogbobine listed 10 key areas of uncertainties, including debt sustainability, oil sector performance, global energy dynamics, global economic outlook, energy transition and subsidy reforms, sociopolitical instability, food security and agriculture resilience, government fiscal performance (revenue and spending priorities), exchange rate management strategy, and inflation and interest rate management strategy.
He said, “All our foreign exchange issues can be resolved with increased oil production. If Nigeria’s oil production increases materially today, you can land on your second foot irrespective of the inflation rate. So, production matters. Why?
There is a simple way to look at the revenue of any organisation. For a country like ours that sells crude oil, it is a matter of the price of crude oil and the quantity of crude oil sold. You want to see the naira at the level you desire; produce more.”
He added that there was a need to resolve structural issues driving inflation, “especially in the area of farming and food security. In petrol subsidy management, we have to sleep with one eye open and ensure it is not coming back. Crude oil production level is very important.”
The January 2025 oil production status data published by the Nigerian Upstream Petroleum Regulatory Commission indicated that the aggregate output increased by 3.6 per cent to 47.7 million barrels, implying a daily average output of 1.54 million barrels excluding condensates of 198,783 bpd—the highest output level in three years. Against this backdrop, Nigeria surpassed its OPEC quota for the month by 3.0 per cent, the first of such an episode in several months.
The country’s major oil terminals performed well in January—Otakpipo (up 12.9 per cent m/m), Escravos (up 11.9 per cent month-on-month), Que Iboe (up 10.9 per cent m/m), Bonny (up 4.1 per cent m/m), Yoho (up 3.1 per cent m/m), Antan (up 2.7 per cent m/m), Forcados (up 2.6 per cent m/m), Okono (up 1.3 per cent m/m), and Tulja-Okwuibome (up 0.4 per cent m/m).
On Nigeria’s debt sustainability, Ogbobine said that the current administration of President Bola Tinubu was a big-spending government, hence heightened concerns about fiscal deficit.
He said, “For Nigeria, we have about 10 key uncertainties, the first being our debt sustainability. Nigeria’s debt sustainability is a key worry point for us, so we have to pay attention to it. Many of us say that our political parties do not have ideologies, but that is not absolutely true. They may not have it in theory, but they have it in practice. This current party is a big government party, and that is why debt sustainability is a key concern. Nigeria’s Fiscal Responsibility Act says that fiscal deficit should be three per cent of the GDP. It is not a law; it is guidance even though it is written in a law. Today, we are at 4.5 per cent of the GDP.”
At the event, Managing Director, Agusto & Co., Yinka Adelekan, emphasised the importance of fostering a deeper understanding of Nigeria’s economic realities and leveraging credible insights to drive sustainable growth.
“As Nigeria navigates an evolving economic climate, businesses and policymakers must engage in meaningful dialogue,” Adelekan said.
“This economic roundtable provides an essential platform to navigate the challenges and opportunities ahead, shaping our collective economic future.”
Reflecting on the legacy of the founder, Adelekan added, “Mr. Agusto’s contributions to the financial and macroeconomic space were unparalleled. His wisdom, vision, and leadership left an indelible mark on the industry. In this era of macroeconomic reforms, his voice would have been invaluable to the discourse. Through this discussion on Nigeria’s current tax reforms and their impact on households, businesses, and the country, we honour his legacy and the profound impact he made.”
Also expressing his optimism about the potential of Nigeria’s recent economic reforms, the chairman of the event, Fola Adeola, stated, “The unification of exchange rates and the removal of subsidies are bold and necessary steps towards a stronger economy. Now, the focus must be on effectively implementing these policies to ensure they deliver significant benefits for all Nigerians.”
The event featured a panel session where industry experts and policymakers engaged in insightful discussions on Nigeria’s economic outlook, regulatory landscape, and investment climate.
The panellists include Adelekan, Senior Lecturer at Lagos Business School and Former Chairman of the Economic Advisory Council; Dr. Doyin Salami, Group Managing Director and Chief Executive Officer of Cowry Asset Management; Mr. Johnson Chukwu, Managing Director and Chief Executive of Coleman Technical Industries Limited; Mr. George Onafowokan, Managing Director of Infrastructure Credit Guarantee Company Limited; and Mr. Chinua Azubike.
