President Bola Tinubu says the target of the 2025 budget is to see a decline in inflation from the current 34.6 per cent to 15 per cent next year.
The President stated this during his presentation of the N49.7 trillion 2025 budget proposal to a joint session of the National Assembly on Wednesday.
He also said that the exchange rate will improve from approximately N1,700 per dollar to N1,500.
According to him, “This is an ambitious but necessary budget to secure our future.
“The Budget projects inflation will decline from the current rate of 34.6 percent to 15 percent next year, while the exchange rate will improve from approximately 1,700 naira per US dollar to 1,500 naira, and a base crude oil production assumption of 2.06 million barrels per day,” Tinubu said.
However, some economists have criticized the proposed N49.7 trillion 2025 budget for its ambitious projections, cautioning that if not properly handled could create more challenges for the economy. They are also not comfortable with the provision of N15.8 trillion for debt service, noting that the country should seek more creative ways to fund the budget than just borrowing.
He said the budget projections are based upon observations such as reduction of petroleum products importation, increased export of finished petroleum products, bumper harvest driven by enhanced security, reducing reliance on food imports, among others.
Tinubu listed highlights of the budget to include defence and security – N4.91 trillion, infrastructure – N4.06 trillion, health – N2.4 trillion, and education – N3.5 trillion, among others.
Nigerians are grappling with economic hardship following an incessant increase in inflation and a volatile exchange rate that has seen dollar exchange as high as N1,700 in recent days.
On Monday, the National Bureau of Statistics (NBS) said Nigeria’s headline inflation rate rose to 34.60 per cent in November 2024 from 33.88 per cent in October 2024.
The November inflation rate showed an increase of 0.72 per cent points compared to the October 2024 inflation rate, according to NBS’s latest Consumer Price Index (CPI) report which measures the rate of change in prices of goods and services.
“On a year-on-year basis, the Headline inflation rate was 6.40 per cent points higher than the rate recorded in November 2023 (28.20 per cent). This shows that the Headline inflation rate (year-on-year basis) increased in November 2024 compared to the same month in the preceding year (i.e., November 2023),” the Bureau said.
Significantly, food inflation rate in November 2024 was 39.93 per cent on a year-on-year basis, 7.08 per cent points higher than the rate recorded in November 2023 (32.84 per cent).