•The chief economist at SPM Professionals, Paul Alaje
A renowned economist, Paul Alaje, says President Bola Tinubu’s 15% inflation rate projection for 2025 is unrealistic if the policy environment remains unchanged.
Alaje faulted some aspects of the 2025 budget proposed by the president, saying they are not pragmatic.
“Check the 2025 Budget, the government is looking at 15% inflation rate. I doubt it very much,” he said on Channels Television today.
On December 18, 2024, Tinubu presented ₦49.7 trillion 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.
When Tinubu was sworn in as Nigeria’s president in May 2023, 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.
However, Alaje said Nigeria’s headline inflation would remain around the 30% corridor in 2025 consistent with the policy environment.
The economist said, “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%. If the policy environment is still sustained, we will still likely be around 30% corridor.
“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 econometrics number 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 in the budget that I have a lot of doubts about whether they would be realistic of not.”
Tinubu’s 2025 ₦49.7tn budget proposal was about ₦20tn higher than that of 2024. In December 2023, Tinubu had presented the 2024 budget proposal of ₦27.5tn, his first, before the National Assembly. The Senate increased the bill by ₦1.2tn and approved ₦28.7tn for the 2024 Budget.
