The federal government has expressed concern that the inflation rate in Nigeria may rise to 20 per cent if the current rise in the price of crude oil was sustained.

The view was expressed in Lagos by the Chief Economic Adviser to the President, Dr. Tope Fasua, when he presented “Nigeria’s Economic Environment in 2026 and Beyond,” at the monthly breakfast session of the Nigeria-South Africa Chamber of Commerce.

Fasua said: “People are recalculating how much is crude oil price today and multiplying it with 1.5 million barrels per day and believed the country is making so much money.

“I was listening to one very powerful financial consultant say that Nigeria is making so much money now.

“But the big problem is that if we are not careful inflation will erode all of that money.

“If this crude oil price does not come down, this inflation may hit up to 20 per cent.”

He also envisaged a national budget of N100 trillion for the country to address its infrastructure deficit, as he insisted that debt was not the problem but underfinancing.

He also admonished state governors who were proud that they had not borrowed a kobo to start borrowing to create transformational infrastructure for their states.

 Fasua also disclosed that the federal government had carried out an upward review of its revenue expectation due to substantial inflows from tax collections

“The revenue expectations for this year have been reviewed upwards. Unstated, but it has been reviewed upwards because I understand that NRS and customs are giving new numbers as a result of the tax reform.

“So, I would say that N68 trillion is not enough. I want to see N100 trillion budget in Nigeria as long as that budget is detailed and creates something that builds infrastructure for the people.

“I would say that we need a lot more infrastructure,” he said.

 According to him, earnings from sale of crude oil is no longer the centre of governments” revenue because what comes from crude oil is now inconsequential compared to what the NRS gets from VAT.

He said: “As a matter of fact, according to the 18, the Nigeria Extractive Industry Transparency Initiative, Nigeria’s beneficial parts of every crude oil barrel is about 35 per cent, maximum 40 per cent.

“So, if you want to do the calculation, multiply by 45 per cent at most to know what Nigeria gets.”

Fasua noted that the composition of public debt in Nigeria showed that the federal government was accountable for 93 per cent while state governments account for seven per cent.

He said: “But note that most Nigeria state governments are not borrowing. In fact, they boasted about it.

“Governor Soludu of Anambra State boasted about it. But I do not think there are any grounding points for you to say that you are not borrowing.

“Because it is simplistic from a treasury management perspective.

“Well, that also means that the government did not think about the kind of transformative infrastructure that could happen in that state,” he added.

 Dike Onwuamaeze