The federal government has provided an explanation for how it will achieve the 15 percent projected inflation in the 2025 appropriation bill submitted to the National Assembly by President Bola Tinubu on Wednesday.
In what the president described as an “ambitious but pragmatic” budget of N49.7 trillion to the joint session of the National Assembly, its practicality and feasibility of the key assumptions has set the stage for intense debate by analysts.
President Tinubu said the executive is expecting the inflation rate to decelerate from its current 34.6 per cent to 15 per cent next year to ease the pains most Nigerians currently face.
Providing further insight on how that would be achieved, a Senior Presidency source said: “The projected decline in inflation in 2025 is attributed to enhanced security measures in 2024 are expected to lead to a bumper harvest, driving down food prices and reducing reliance on food imports. This will ease inflationary pressures, particularly in the food segment, which significantly influences the overall inflation rate.”
He also said the commencement of domestic production of refined petroleum products will reduce the demand for foreign exchange (forex) to import these products. “Additionally, increased exports of refined products will boost foreign exchange earnings, further stabilising the currency.”
The source said a projected increase in oil output, coupled with substantial reductions in upstream production costs, will enhance revenue generation and improve Nigeria’s forex reserves.
The source also argued that improved macroeconomic stability and favourable policies are expected to attract greater foreign portfolio investments, leading to a higher supply of forex. “This will ease pressure on the exchange rate, contributing to lower imported inflation.”
Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona in a statement on the 2025 budget said, “Structural reforms are indispensable to reducing inflation to 15% and stabilising the exchange rate at ₦1,400/$1. Addressing food and energy supply chain bottlenecks, fast-tracking local petroleum production projects, and fostering alignment between monetary and fiscal policies will restore confidence in the naira and ease inflationary pressures.”
