President of the Lagos Chamber of Commerce and Industry (LCCI), Gabriel Idahosa, has said rising debt burdens and limited access to international financing will continue to hinder Nigeria’s economic recovery this year.

Speaking yesterday at the first quarterly State of the Economy conference for the year in Lagos, he said the global geopolitical environment in 2025 remained fraught with challenges that would significantly shape the economic outlook.

“Escalating competition between the U.S. and China, marked by intensifying trade and technology wars, may disrupt supply chains and fuel global market uncertainty in the near term,” he said.

Lamenting persistent inflationary pressures, he said food inflation remained a pressing issue, with worsening food insecurity, conflicts and economic instability, regretting that food and headline inflation, coupled with slow economic growth, would push millions further into poverty.

According to him, Nigeria is experiencing a severe food security crisis, with projections indicating that 33.1 million Nigerians will face high levels of food insecurity by mid-2025.

This alarming situation, he said, was driven by economic hardships and record-high food inflation and called for the extension of the import waivers given to critical imports, including agricultural input.

He said while the recent GDP growth figures highlighted commendable progress, the gap between current economic realities and the 2025 budgetary goals raised significant concerns that required targeted actions, added that the GDP growth of 3.46 per cent in Q3 2024, driven primarily by the services sector (5.19 per cent growth, 53.58 per cent GDP contribution), underscored the persistent concern about productivity in the real sector to diversify the economy.

Urging the Federal Government to embrace fiscal discipline, and growth drivers and create an enabling environment for business recovery, he said the government’s projected GDP growth rate of 6.4 per cent was ambitious, given the average growth trajectory of 2.5–3.5 per cent over recent years.

He lamented that the private sector was plagued with increased borrowing costs, reduced investment incentives, heightened uncertainties and a pressured FX market.

Rate hikes alone, he noted, would not curb inflation without resolving the challenges of the real sector, the agriculture and manufacturing sectors, which can create more jobs, manufacture for consumption and export, and form the economy’s industrial base.

Speaking on the 2025 budget, he said its full implementation was the key performance driver, adding that fiscal discipline must complement efforts to effectively manage the ₦15.81 trillion debt servicing allocation.

“Achieving inflation reduction to 15 per cent and stabilising FX at ₦1,400/$1 requires addressing structural challenges, he said.

Decrying the decayed power sector, he said despite having the capacity to generate 14,000MW, the country was still struggling to supply an average of 4,000MW due to an overstretched grid and outdated infrastructure.