FG Outlines Strategy to Achieve 15% Inflation by 2025

The Federal Government has detailed its approach to achieving a 15% inflation rate in 2025, as outlined in the N49.7 trillion appropriation bill presented by President Bola Tinubu to the National Assembly earlier this week. The ambitious budget, described by Tinubu as “pragmatic,” has sparked widespread debate among analysts regarding its feasibility and key assumptions.

President Tinubu emphasized the administration’s expectation that inflation will drop from its current level of 34.6% to 15% by next year, aiming to alleviate the economic hardships faced by many Nigerians.

A senior official in the presidency attributed the projected decline to several factors. Enhanced security measures, implemented in 2024, are expected to lead to a significant increase in agricultural productivity, resulting in lower food prices and reduced dependence on imports. The reduction in food import reliance is anticipated to ease inflationary pressures, particularly in the food segment, which heavily influences overall inflation rates.

Additionally, the official noted that the commencement of domestic production of refined petroleum products will play a critical role. With local refining set to reduce the demand for foreign exchange used to import fuel, and the expected increase in refined product exports boosting foreign exchange earnings, the naira’s stability is likely to improve, contributing to lower inflation.

Further, the government projects increased oil output alongside a reduction in upstream production costs, which are expected to enhance revenue and bolster Nigeria’s foreign exchange reserves. Improved macroeconomic stability and favorable policies are also anticipated to attract greater foreign portfolio investments, increasing forex supply and easing pressure on the exchange rate. This stability is seen as a key factor in mitigating imported inflation.

In response to the 2025 budget, the Director-General of the Lagos Chamber of Commerce and Industry, Dr. Chinyere Almona, emphasized the importance of structural reforms. She identified the need to address food and energy supply chain bottlenecks, fast-track local petroleum production, and align monetary and fiscal policies to stabilize the naira and reduce inflationary pressures. Dr. Almona added that these measures would be critical to achieving the government’s targets and restoring confidence in the economy.