Kehinde Fajobi
Economist Paul Alaje has expressed scepticism about President Bola Tinubu’s projection of reducing Nigeria’s inflation rate to 15% in 2025, describing it as unrealistic given the current policy environment.
Speaking on Channels Television’s Sunrise Daily on Monday, Alaje criticised aspects of the ₦49.7 trillion 2025 budget proposal, saying some of its projections were impractical.
“Check the 2025 Budget. The government is looking at a 15% inflation rate. I doubt it very much,” he said.
President Tinubu, during the presentation of the 2025 budget to the National Assembly on December 18, outlined key allocations, including ₦4.91 trillion for defence and security, ₦4.06 trillion for infrastructure, ₦2.4 trillion for health, and ₦3.5 trillion for education.
Tinubu projected that inflation would drop from the current 34.6% to 15% in 2025, alongside an improvement in the exchange rate from ₦1,700 to ₦1,500 per dollar.
However, Alaje contended that the inflation target was overly optimistic.
“If I tell you what the econometric numbers are saying, based on the current policy environment, the headline inflation will likely remain in the 30% corridor in 2025,” he explained.
He added, “If the policy environment changes, there may be improvements. But if it remains the same, we will sustain inflation around the 30% level.
“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 analysis to determine its feasibility.”
Alaje also noted that while some aspects of the budget were realistic, others raised significant doubts.
The 2025 budget proposal marks a significant increase from Tinubu’s ₦27.5 trillion 2024 budget, which was later adjusted to ₦28.7 trillion by the National Assembly.
Nigeria’s inflation rate, which stood at 22.41% when Tinubu assumed office in May 2023, has since surged to 34.6%, a rise attributed to his policies on petrol subsidy removal and forex rate unification.