Economist Questions Tinubu’s 15% Inflation Target For 2025, Labels Projection Unrealistic

Economist Paul Alaje has cast doubt on President Bola Tinubu‘s projection of a 15% inflation rate for 2025, describing it as unrealistic given the current policy environment.

Speaking on Channels Television’s Sunrise Daily programme on Monday, Alaje argued that the proposed fiscal and monetary strategies in the ₦49.7tn 2025 budget are not pragmatic.

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

He emphasized that without significant policy changes, inflation is likely to remain around the 30% corridor throughout 2025.

Alaje’s remarks challenge Tinubu’s optimistic projection made during the budget presentation to the National Assembly on December 18, 2024.

Tinubu had stated that inflation would decline from its current rate of 34.6% to 15% next year, while the naira exchange rate would improve from ₦1,700 to ₦1,500 per dollar.

When Tinubu assumed office in May 2023, Nigeria’s inflation rate stood at 22.41%, according to the National Bureau of Statistics (NBS).

However, inflation surged to 34.6% in November 2024, largely attributed to the removal of petrol subsidies and the unification of forex rates.

These twin policies have drawn criticism from economic experts and citizens alike, citing their impact on cost-of-living and price stability.

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.