The Federal Government has warned that Nigeria’s inflation rate could climb to around 20% if the current rise in global crude oil prices continues.

The warning was issued in Lagos by the President’s Chief Economic Adviser, Dr. Tope Fasua, during a presentation at the Nigeria–South Africa Chamber of Commerce breakfast session.

He explained that although higher oil prices may appear to increase national revenue, the gains could be quickly eroded by inflation if not carefully managed. According to him, rising prices may create the illusion of increased wealth while reducing real economic value for citizens.

Fasua also projected that Nigeria may need a ₦100 trillion budget to adequately address its infrastructure gap, arguing that the real challenge is not debt itself but insufficient investment in development projects.

He urged state governments to reconsider their reluctance to borrow, stating that strategic borrowing could help fund transformative infrastructure and stimulate long-term economic growth.

On public finances, he noted that revenue expectations have been revised upward due to improved tax and customs collections, suggesting stronger non-oil revenue performance.

Fasua also highlighted that crude oil now plays a smaller role in government revenue than many assume, pointing instead to growing contributions from VAT and tax reforms.

He further referenced data indicating that the federal government accounts for the bulk of national debt, while state governments carry a much smaller share. However, he argued that some states may be limiting development by avoiding borrowing altogether.

Overall, he stressed the need for a shift toward infrastructure-driven growth, expanded public investment, and more flexible fiscal strategies to support economic stability.