An economist, Paul Alaje, has expressed doubts over President Bola Tinubu’s forecast of a 15% inflation rate for 2025, suggesting that such a projection is unrealistic unless there are significant changes in the country’s policy environment.
Alaje raised concerns about certain aspects of the President’s proposed 2025 budget, stating that some elements may not be practical.
Check the 2025 Budget, the government is looking at 15% inflation rate. I doubt it very much,” he said on Channels Television’s Sunrise Daily programme on Monday.
Alaje questioned the feasibility of the 15% inflation rate target, pointing out that based on current economic conditions, it is unlikely to be achieved. The remarks came after President Tinubu presented a ₦49.7 trillion budget estimate to the National Assembly on December 18, 2024. The budget includes significant allocations for defense and security, infrastructure, health, and education.
When Tinubu assumed office in May 2023, Nigeria’s inflation rate was 22.41%, according to official figures from the National Bureau of Statistics. However, inflation increased sharply to 34.6% by November 2024, largely due to the government’s policies on petrol subsidy removal and foreign exchange rate unification. Despite this, the President projected a decline in inflation to 15% by 2025, along with an improvement in the exchange rate from around ₦1,700 to ₦1,500 per dollar.
Alaje, however, believes that inflation will remain around 30% in 2025, given the prevailing policy environment. He noted that unless there are significant policy changes, inflation is likely to stay within the 30% range. He also questioned whether the President’s projection was backed by accurate economic modeling and analysis.
While Alaje acknowledged that some aspects of the 2025 budget are realistic, he expressed doubts about others, particularly regarding their implementation. Tinubu’s proposed ₦49.7 trillion budget for 2025 represents an increase of about ₦20 trillion compared to the previous year, when the government presented a ₦27.5 trillion budget for 2024. After Senate adjustments, the 2024 budget was approved at ₦28.7 trillion.
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.”
