2025 Budget: Tinubu’s 15 percent inflation rate target aspirational, bullish but 27-30 percent realistic —Experts

*Experts commend the Federal Government of Nigeria on the N49.7 trillion 2025 Budget, which President Bola Ahmed Tinubu presented to the Joint Session of the National Assembly, in Abuja,  for consideration recently, but take exceptions to his 15 percent inflation rate target in the Appropriation Bills, describing the projected inflation figure as ‘very bullish, aspirational, and unrealistic’

Gbenga Kayode | ConsumerConnect

Economic experts have applauded the Nigerian Government for the country’s N49.7 trillion 2025 Budget estimates, which President Bola Ahmed Tinubu, GCFR, presented to the Joint Session of the National Assembly (NASS) for consideration Wednesday, December 18, 2024, in Abuja, FCT.

But the analysts also described the 15 percent protected inflation rate in this year’s Federal budget as “very bullish and aspirational” as well as unrealistic.

Mr. Bismarck Rewane, Managing Director of Financial Derivatives Company Limited

ConsumerConnect reports President Tinubu, while presenting the 2025 N49.7 trillion Federal Appropriation Bills before the National Assembly (NASS) December 18, had expressed optimism that Nigeria’s inflation rate would decline from the current 34.60 percent to 15 percent in this fiscal year.

Highlights of 2025 Federal Budget estimates

President Tinubu as well highlighted some aspect of the budget as defence and security – N4.91 trillion, infrastructure – N4.06 trillion, health – N2.4 trillion, education – N3.5 trillion, among others.

The Nigerian leader’s N49.7 trillion budget proposal for 2025 was about N22 trillion higher than that of 2024.

It is equally noted that Tinubu, during his 2025 budget presentation, had expressed optimism that Nigeria’s inflation rate would decline from 34.6 percent to 15 percent this year.

“The budget projects inflation will decline from the current rate of 34.6 percent to 15 percent next year (2025) while the exchange rate will improve from approximately N1,700 per dollar to N1,500 per Dollar,” stated he.

Mr. Bismarck Rewane, Managing Director of Financial Derivatives Company Limited, while acknowledging that humans are free to have aspirations, however, described President Tinubu’s 15 percent inflation target for this fiscal year as “aspirational” and “bullish”.

Rewane, an economist, stated this while featuring on a Channels TV breakfast programme, monitored Thursday, January 2, 2025, in Lagos.

Between the world of ‘reality’ and ‘optimism scenarios’, by Rewane

Economist Rewane also averred President Tinubu’s target is not realistic.

The expert explained: “Well, the target is an aspiration; the reality that we think is inflation could reduce from approximately 35% to somewhere like 27% or 25% but a 15% rate on inflation is very bullish and aspirational but we are free to have our aspirations.

“We deal in the world of reality and in the world of reality, we see more of 27% to 25%.

“I would rather bet on that than bet on much more optimistic scenarios.”

According to the National Bureau of Statistics (NBS), at the time Tinubu was sworn in as the Nigerian President May 29, 2023, the country’s inflation rate was 22.41 percent.

The inflation rate later rose astronomically to 34.6 percent November 2024, over 12 percent higher.

The experts have attributed the development to President Tinubu administration’s policies of petrol subsidy removal and unification of the Foreign Exchange (Forex) rates.

Earlier, Paul Alaje, also an economist, had opined that Tinubu’s 15 percent inflation rate projection for 2025 is unrealistic, if the policy environment in Nigeria remains unchanged.

Alaje: Nigeria’s policy environment will keep inflation rate at 30 percent unless….

Appreciating the contents of President’s N49.7 trillion 2025 Budget, Alaje, who also had answered questions on the private television station Monday, December 30, yet faulted some aspects of the budget, averring that such aspects of the budget are not pragmatic.

Alaje stated: “Check the 2025 Budget, the government is looking at 15% inflation rate. I doubt it very much.”

The economist, differed a bit from Rewane’s 25-27 percent inflation rate, and said that the country’s headline inflation would remain around the 30 percent corridor this year in view of the current policy environment in the West African country’s economy.

“If I tell you what the econometric numbers are saying, based on the current policy environment, if the policy environment changes, it may improve.

“Like I told you in 2024 January that we will sustain 30 percent. If the policy environment is still sustained, we will still likely be around 30 percent corridor,” stated he.

The economist further opined that “we might not see the 15 percent that we wish to see because it is a mere projection.

“I doubt if that projection is subjected to econometric number to project what the future will look like; what the impact will look like, I doubt very much.”

Alaje, nonetheless affirmed that “some aspects of the budget are realistic, but there are some aspects in the budget that I have a lot of doubts about whether they would be realistic of not.”

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