2025: Tinubu’s 15% Inflation Target Unrealistic—Alaje

While President Bola Ahmed Tinubu’s administration has pegged a proposed inflation target to 15% in the 2025 budgetary allocation presented to the National Assembly, An economist, Paul Alaje, says President Bola Tinubu’s inflation rate projection for 2025 is unrealistic if the policy environment remains unchanged.

According to the economist, he faulted some aspects of the 2025 budget proposed by President Bola Tinubu, saying they are not pragmatic.

Alaje, while appearing on a television program on Monday, said, “Check the 2025 budget; the government is looking at a 15% inflation rate. I doubt it very much.”

On December 18, 2024, Tinubu presented ₦49.7tn budget estimates before a joint session of the National Assembly. The President listed some of the highlights of the budget as defence and security – ₦4.91tn, infrastructure – ₦4.06tn, health – ₦2.4tn, education – ₦3.5tn, among others. Tinubu’s ₦49.7tn budget proposal for 2025 was about ₦22tn higher than that of 2024.

Nigeria’s inflation rate was 22.41%, according to official numbers by the National Bureau of Statistics (NBS). The inflation rate rose astronomically to 34.6% in November 2024, more than 12% higher, a development that economic wizards have attributed to Tinubu’s twin policies of petrol subsidy removal and unification of the forex rates.

However, during his 2025 budget presentation, Tinubu expressed optimism that Nigeria’s inflation rate would decline from 34.6% to 15% in 2025.

“The budget projects inflation will decline from the current rate of 34.6% to 15% next year (2025) while the exchange rate will improve from approximately ₦1,700 per dollar to ₦1,500 per dollar,” the President had said.

Alaje did, however, predict that, in keeping with the policy context, headline inflation in Nigeria will stay under the 30% range in 2025.

In light of the current policy environment, the economist stated, “If I tell you what the econometric numbers are saying, it may improve if the policy environment changes.”

“As I stated in January 2024, we will maintain 30%. We will probably still have a 30% corridor if the current policy environment continues.

“So, we might not see the 15% that we wish to see because it is a mere projection. I doubt if that projection is subjected to econometric numbers to project what the future will look like; what the impact will look like, I doubt very much.

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