Nigeria’s inflation rate is forecast to decline significantly to approximately 15% in 2025, down from 34.6% in November, President Bola Tinubu announced during his budget presentation on Wednesday. The drop is attributed to reduced petroleum product imports.
In his second budget address since taking office, Tinubu emphasized that spending in 2025 would prioritize security, infrastructure, and initiatives to alleviate the ongoing cost-of-living crisis.
The proposed 2025 budget outlines total expenditures of 47.90 trillion naira, with a projected deficit of 3.89% of GDP, equivalent to roughly 13.0 trillion naira.
“The reforms we have introduced are starting to deliver tangible results. There will be no backtracking,” Tinubu stated in his televised speech.
Inflation soared in the latter half of 2023 after Tinubu’s government devalued the naira (NGN=D1) and removed fuel subsidies in a bid to stimulate economic growth and stabilize public finances. However, these measures exacerbated Nigeria’s worst cost-of-living crisis in decades.
In response, the Central Bank of Nigeria raised interest rates six times in 2024, amounting to a total increase of 875 basis points.
Despite economic challenges, Tinubu reported that foreign exchange reserves remain robust at approximately $42 billion, supported by a healthy trade surplus. However, he noted that 15.18 trillion naira would be required in 2025 for debt servicing.
