President Bola Tinubu has restated his administration’s unwavering commitment to reducing the inflation rate from 34.6% to 15% by the end of 2025.
He made this known in his New Year message to Nigerians on Wednesday.
“In 2025, our government is committed to intensifying efforts to lower these costs by boosting food production and promoting local manufacturing of essential drugs and other medical supplies,” Tinubu explained. “We are resolute in our ambition to reduce inflation from its current high of 34.6% to 15%.”
The president emphasized the progress made in key economic areas in 2024.
“Fuel prices have gradually decreased, and we recorded foreign trade surpluses in three consecutive quarters. Foreign reserves have risen, and the Naira has strengthened against the US dollar, bringing greater stability,” he said.
Tinubu also lauded the record growth of the stock market, which generated trillions of naira in wealth, and a surge in foreign investment that signaled renewed global confidence in Nigeria’s economic policies. However, he acknowledged that food and essential drug prices continued to strain many Nigerian households, a challenge his administration is determined to tackle in 2025.
Reflecting on the challenges faced in 2024, Tinubu acknowledged the economic hardships endured by households but highlighted several indicators pointing to a brighter economic future.
“Though 2024 posed numerous challenges to our citizens and households, I am confident that the New Year will bring brighter days. Economic indicators point to a positive and encouraging outlook for our nation,” Tinubu stated.
Backstory
President Tinubu’s 2025 budget presentation, made on December 18, 2024, projected a reduction in inflation from the current rate of 34.6% to 15% in 2025. The proposed budget, which is about ₦22 trillion higher than that of 2024, includes significant allocations for defense and security (₦4.91 trillion), infrastructure (₦4.06 trillion), health (₦2.4 trillion), and education (₦3.5 trillion), among other sectors.
- Despite these ambitious plans, analysts remain skeptical about the feasibility of these projections, especially the inflation target.
- When Tinubu assumed office in May 2023, Nigeria’s inflation rate stood at 22.41%, according to the National Bureau of Statistics (NBS). However, inflation surged to an alarming 34.6% by November 2024, a rise many economists attribute to the president’s controversial policies, including the removal of the petrol subsidy and the unification of the country’s foreign exchange rates.
- Despite these challenges, President Tinubu’s budget speech projected optimism, not only for inflation but also for the exchange rate, which he believes will improve from ₦1,700 per dollar to ₦1,500 per dollar by 2025.
- Checks by Nairametrics show that the exchange rate between the naira and the dollar ended the year at N1,535/$1 representing a 40.9% depreciation for 2024.
The official exchange rate between the naira and dollar closed in 2023 at N907.11/$1 thus depreciating by 40.9% for the year which compares to a 49.1% devaluation at the end of 2023.
