President Bola Tinubu has reaffirmed his commitment to reducing Nigeria’s inflation rate from 34.6% to 15% by the end of 2025. In his New Year message, Tinubu emphasized the government’s efforts to lower costs by boosting food production and promoting local manufacturing of essential drugs and medical supplies.
To achieve this ambitious target, the government has allocated significant funds in the 2025 budget, including ₦4.91 trillion for defense and security, ₦4.06 trillion for infrastructure, ₦2.4 trillion for health, and ₦3.5 trillion for education.
However, analysts remain skeptical about the feasibility of this target, considering the country’s current economic challenges. Nigeria’s inflation rate has surged from 22.41% in May 2023 to 34.6% in November 2024, largely due to the removal of the petrol subsidy and the unification of foreign exchange rates.
Some experts suggest that Nigeria can learn from other countries, such as Turkey and Argentina, which have successfully reduced inflation through monetary tightening, cutting public spending, and promoting local production.
Key Strategies to Reduce Inflation:
- Monetary Tightening: Raising interest rates to reduce borrowing and spending
- Cutting Public Spending: Reducing government expenditure to decrease demand for goods and services
- Promoting Local Production: Encouraging local manufacturing to reduce reliance on imports and decrease prices
- Boosting Food Production: Increasing food production to reduce prices and improve food security
It remains to be seen whether President Tinubu’s administration can achieve its inflation target, but it’s clear that a multi-faceted approach will be necessary to address Nigeria’s economic challenges.
Source: Nairametrics
