Nigeria is targeting a reduction in inflation from 34.6% to 15% by the end of 2025. The President Bola Tinubu gave the projection during a presentation of the 2025 budget before a joint session of the National Assembly on Tuesday.
The 2025 budget, tagged ‘budget of restoration”, outlines ambitious fiscal reforms aimed at stabilising the nation’s economy and driving sustainable growth. It is built on key assumptions that the country will be able to meet a daily crude oil production target of 2.6 million barrels and a foreign exchange reduction from N1,700 to N1,500 per dollar.
The projection that inflation will drop from 34.6% to 15% next year is a very bold one given that food prices and other commodities have skyrocketed since the President came into office over a year ago. This is due to the decision to remove subsidy on petrol, leaving the pump price to be determined by market forces. Also, the foreign exchange market was floated, leaving the naira’s value to the dictates of forces of demand and supply.
In addition, the Central Bank has raised the lending rate six times, leading to a more expensive borrowing cost for businesses in the country. All of these have created a tense business environment and spiked the cost of living in Africa’s most populous nation.
The President urged Nigerians to be patient, noting that these policies will soon start yielding the much anticipated result for the country. With the 2025 budget, Tinubu is hoping to increase Nigeria’s crude oil output and exports while achieving a substantial reduction in upstream oil and gas production costs.
He is also targeting more foreign exchange inflow through portfolio investments like Euro bond issuance and expanded export opportunities.
