Economists and development experts have asked President Bola Tinubu to focus on enhancing national security and the naira this year.
The experts believe that reducing the 34 per cent inflation to 15 per cent in 2025 as pledged by the President will require significant and swift action across various sectors of the economy.
Tinubu’s announcement of the removal of the fuel subsidy shortly after his inauguration in 2023 resulted in a hike in the cost of transportation, fueling industrial unrest and nationwide protests led by young Nigerians.
The decision culminated in several hikes in the pump price of petrol by as much as 152 per cent.
However, the President’s New Year broadcast on Wednesday highlighted economic growth indicators, including lower fuel prices, rising foreign reserves and a stronger naira as signs of progress in 2024 that would continue into 2025.
He assured Nigerians of the government’s resolve to boost food production and reduce inflation on food and drugs to 15 per cent while strengthening the economy in 2025.
The President stated, “Though 2024 posed numerous challenges to our citizens and households, I am confident that the New Year will bring brighter days.
“Economic indicators point to a positive and encouraging outlook for our nation. Fuel prices have gradually decreased, and we recorded foreign trade surpluses in three consecutive quarters. Foreign reserves have risen, and the Naira has strengthened against the US dollar, bringing greater stability.”
Speaking on the presidential broadcast, an economist, Shedrach Israel of Lotus Beta Analytics, agreed with the President that inflation would reduce significantly, attributing the projection to increased productivity, improved security, and strategic reforms.
“I project that inflation is going to drop. What I cannot say is if it should drop by 50 per cent or over 50 per cent because from 34 to 15, that’s already over 50 per cent,” Israel said, referencing Tinubu’s ambitious target.
Israel pointed to improved security and year-round farming initiatives launched in 2024 as key drivers of increased supply.
“We are seeing increased supply in 2025—both consumer products and petroleum. This is because of the improved security situation and the year-round farming efforts initiated in 2024,” he explained.
He added that enhanced security would encourage agricultural productivity.
“The security situation is going to make everyone go back to the farm, which will increase supply and drive down prices,” Israel said.
The economist also projected relative stability in the naira’s exchange rate, driven by operational refineries and increased crude oil exports.
“We are likely going to see some stability with the exchange rate. It may not get as bad as it was last year,” he noted.
Israel highlighted the impact of structural reforms, including potential consumer credit initiatives aimed at increasing purchasing power.
“I’m hearing about an agency solely focused on consumer credit, similar to systems in developed countries with mortgages and credit facilities. These reforms will increase purchasing power and reduce inflation indirectly,” he stated.
He further explained that the implementation of the 2025 budget could temporarily boost productivity.
“When new budgets come into play, there’s a release of funds that improves economic activities. This will likely lead to increased production and supplies, which will impact prices positively,” he added.
Despite the optimism, Israel cautioned that the changes would be gradual.
“It is not going to be so early or so drastic. Inflation reduction will be progressive, and we may see it come down towards the end of the year,” he emphasised.
Another economist, John Idris, described Tnubu’s pledge as ambitious but achievable with decisive action.
“Reducing inflation to 15 per cent is feasible but highly challenging. It requires swift action across multiple sectors, robust coordination between the Central Bank and the government, and consistent policies to inspire public and investor confidence,” he said.
He emphasised the importance of stabilising the exchange rate, addressing food inflation, and reducing energy costs through investments in agriculture, refinery projects, and rural infrastructure.
Drawing from examples like Egypt and Brazil, Idris pointed out that bold reforms, though initially painful, can lead to long-term stability.
“The path is tough, but with clear communication and stakeholder buy-in, this goal can be achieved,” Idris added.
Associate Professor Unekwu Onuche of the University of Africa, Bayelsa State, also expressed cautious optimism about the government’s goal to reduce inflation.
“Inflation rises more easily than it drops,” Onuche said, adding that bringing it down to 25 per cent would be a notable achievement.
He emphasised that reducing the pump price of fuel and stimulating production at lower costs could help curb inflation.
“If the government can bring the price of petrol down, that’ll be okay. I wish the president well,” Onuche stated.
Also speaking with The TheNigerian on Wednesday, a development economist, Dr Aliyu Ilias, described the benchmark inflation target as over-ambitious.
He added that even last year, the Federal Government did not meet its inflation target, as inflation rose significantly in 2024.
“From all indications, we are not putting a lot of things in place to reduce inflation. I don’t think inflation will come down to the level of 15 per cent,” he noted.
However, he said the inflation rate may drop to about 22 per cent if the government is more committed to tackling it.
He further urged the government to ensure a stable foreign exchange market and ease of business in the economy.
Ilias also stressed the need for lesser taxation and lower import duty to help moderate the cost of doing business in the country.
On his part, the Chief Executive Officer of Economic Associates, Dr Ayo Teriba and Chief Executive Officer of Financial Derivatives, Bismarck Rewane, have said that the government’s actions in 2025 will have an impact on the economic landscape more than what it says.
Speaking with The TheNigerian, Teriba, a renowned economist, expressed concerns about the amount budgeted for interest payment in the 2025 appropriation bill.
He said, “At N16tn, it means that Nigeria is merely borrowing to pay interest. That’s why the last Eurobond issue was at 10 per cent for a sovereign on a dollar liability. That’s reckless! You are issuing junk bonds and nobody should put Nigeria in a situation.
“Reserves are key. Unless you achieve reserve stability, you are not going to be able to stabilise the naira and unless you stabilise the naira, inflation is not going to come down. If you can raise the reserve adequacy, that is the kind of conversation we should be having with our President and his team, if we can take drastic actions to attract Foreign Direct Investments instead of debts.
“If you can attract FDI into sectors that can absorb the high value of FDI, the then arrival of FDI could lift both gross and net reserves and produce rapid improvement in the exchange rate and similarly produce rapid improvement in inflation. So, a five per cent inflation rate is possible next year.
“Economists don’t prophesy; they make conditional statements that if the government, the president, can make the same efforts that they are making with the tax and finance acts, on an investment act and get $50bn in FDI over the next year, the exchange rate will improve and inflation will go to a single digit.”
Rewane in his forecast on Arise TV monitored by our correspondent said, “What we expect to see is a flat-lining or moderation in inflation. That is, inflation coming down from about 35 per cent to about 33 per cent. We expect that the monetary authorities, because of that trend will become less hawkish.
“For the first quarter of 2025, I think we will have some normalisation in the price of petrol, diesel, and kerosene. Let’s not get carried away by the current price war. I think the equilibrium price will be about N1,100 which is fair at this point and disincentivise the smuggling of fuel across the borders.”
Also speaking, the Managing Director/Chief Executive of Cowry Treasurers, Charles Sanni, advised the government to draw lessons from the Buhari administration’s focus on social development.
“One thing I will advise is that the Buhari government was focused on social development, and that was a good model. The Tinubu administration can adopt this by making massive investments in solar energy to empower small-scale businesses with access to affordable energy. This will help foster economic growth and reduce poverty,” Sanni said.
He emphasised the need for targeted agricultural reforms, particularly in regions affected by insecurity, to boost food production and job creation.
“The government should address security challenges to enable farmers to return to work. There are vast lands that can be cleared for large-scale farming, and crops like corn and mushrooms can provide significant yields. Graduates looking for jobs can also be engaged in such agricultural initiatives, with access to credit facilities to support their efforts,” he added.
Furthermore, he called for the implementation of student loan schemes to ease the financial burden on students and their families and also called prudent use of constituency funds for impactful projects that can quickly benefit the populace.
In a related development, the 2023 Presidential candidates of the Labour Party, Peter Obi and the New Nigeria Peoples Party, Rabiu Kwankwaso, alongside the Social Democratic Party, African Democratic Congress and the Coalition for United Political Parties have called on President Tinubu to reassess his economic policies in 2025 in the light of the economic hardship in the country.
The opposition leaders and their parties said that only a revisit of the policies would lead to appreciable improvement in the standards of living of Nigerians in the New Year.
Obi urged the All Progressives Congress-led administration to consider reducing unnecessary expenditures, streamlining government agencies, and making cost-cutting his priority in 2025.
The ex-Anambra State governor, who spoke through his media aide, Umar Ibrahim, also advised the Federal Government to promote economic diversification and support the growth of other sectors, such as agriculture and manufacturing, to help reduce the country’s dependence on oil exports.
Speaking on behalf of Obi, Ibrahim said, “We will advise President Tinubu to first and foremost, prioritise cutting the cost of governance, which can be achieved by reducing unnecessary expenditures, streamlining government agencies, and promoting transparency in budget allocation.
“He should focus on investing in social protection programmes such as cash transfer initiatives, unemployment benefits, and support for small-scale farmers and traders, to cushion the effects of economic reforms on vulnerable populations.
“Furthermore, promoting economic diversification and supporting the growth of non-oil sectors, such as agriculture and manufacturing, will help reduce the country’s dependence on oil exports and create more opportunities for Nigerians.
“By taking these steps, it can help mitigate the economic challenges facing Nigeria and build a more prosperous future for its citizens.”
The National Secretary of the Labour Party, Umar Farouk, said despite the economic hardships, Tinubu deserves to be given the benefit of the doubt.
He said, “We have seen the hardship being encountered right from the beginning of this administration since they announced their reforms. But we shall continue to hope that 2025 will turn out to be the year when Nigerians will start reaping the benefit of their patience.’’
On his part, Kwankwaso urged Tinubu to address the plight of poor Nigerians suffering untold hardship as a result of government policy implementation.
Kwankwaso, who spoke through the National Publicity Secretary of the NNPP, Ladipo Johnson, stated, “The advice to President Bola Tinubu’s-led Federal Government is that they should be more sensitive to the plight of the masses, especially the welfare and well-being of the average Nigerian. They should take time to review their policies and assess how quickly they can bring down the rising cost of living.’’
The Acting National Chairman of the Peoples Democratic Party, Umar Damagum, advised the President to take a firm stand against insecurity.
“He (Tinubu) should revisit all his failed policies which have put Nigerians in this hardship. He must address the insecurity bedevilling the country which has become an impediment to economic growth,” Damagum said in a brief interview with The TheNigerian.
The PDP Deputy National Youth Leader, Timothy Osadolor, stated that the President and his cabinet lacked the capacity to effectively manage the economy and the country.
Osadolor, who expressed doubts about President Tinubu’s commitment to reducing inflation, argued, “The President likes rhetoric and no actions. The truth is that the President and most of his ministers lack the capacity to manage the country and the economy; they don’t have what it takes to bring down inflation from 35 per cent to 15 per cent. If you give this administration 35 years to manage the economy, the only thing they will do is damage it further, like they are currently doing.
“As a serious President, I would have thought that President Tinubu would use his New Year message to reveal to Nigerians how he has been able to reduce governance costs and the measures he has put in place to prevent the stealing of Nigeria’s scarce resources. But all this government does is show clear incompetence regarding the sensitivity of the plight of the Nigerian people.’’
For Nigeria to overcome its challenges, the CUPP National Secretary, Peter Ahmeh, said the APC government must reduce the cost of governance.
“How does he plan to bring inflation down to 15 per cent? What measures have they put in place? Are they planning to rig the figures? Manipulating data will have huge consequences for Nigeria.
“The President talks without action and results. They should take the first step by reducing the cost of governance. When they do this, Nigerians will take them seriously.”
The National Chairman of the African Democratic Congress, Ralph Nwosu, projected that it might take about six years for Nigerians to enjoy the reform benefits.
The SDP National Chairman, Shehu Gabam, stated that it is unrealistic for the government to reduce inflation to 15 per cent, noting that no measures were being implemented to achieve this goal.
“The President’s New Year speech is just an annual ritual, and I doubt anything good will come out of it. It is unimaginable for some of us who have been around government to hear that in a year they will reduce inflation from 34 per cent to 15 per cent; that is practically impossible,’’ he declared.
