The Nigerian government has unveiled a comprehensive strategy to reduce the country’s soaring inflation from 34% to a more manageable 15% by the end of 2025.
A senior source from the Budget Office of the Federation who spoke to The Nation, who is deeply involved in the formulation of the 2025 budget, confirmed the ambitious target.
“The primary goal is to bring down inflation significantly by addressing key economic factors that are contributing to the price hikes,” the source explained.
The government’s approach relies on four main pillars that will form the backbone of the 2025 budget. These strategies are designed to target structural issues and external factors driving up the cost of living.
One of the first and most critical measures is enhancing security across the country, especially in rural areas. This plan aims to ensure farmers can cultivate their crops and safely transport their produce, which has become a significant challenge due to insecurity.
“Improved security will allow farmers to work without fear of theft or violence. This will lead to higher agricultural output, which will reduce food prices and lessen the need for food imports,” the source noted.
The government’s move to strengthen security is expected to have a direct impact on reducing food inflation, a major driver of the overall inflation rate in Nigeria. The Central Bank of Nigeria (CBN) has long advocated for securing agricultural activities as a fundamental strategy to combat rising prices.
Another critical area of focus is the country’s fuel production capacity. Nigeria has long been reliant on imported refined petroleum products, which has placed significant pressure on the country’s foreign exchange reserves. The government aims to tackle this issue by boosting local refining capabilities.
“By increasing local refining capacity, Nigeria will reduce its reliance on importing refined petroleum products. This will not only save foreign exchange but also reduce inflationary pressures tied to fuel prices,” the source explained.
Local refining is expected to curb the demand for foreign exchange, stabilising the naira and reducing the inflationary impact caused by currency depreciation.
The government also plans to optimise oil production and tackle one of the major challenges in the oil sector: pipeline vandalism and crude oil theft. By using advanced surveillance technologies like drones and satellite monitoring, the government hopes to reduce these disruptions and boost oil output.
“Addressing these issues and improving security in oil-producing regions will help increase Nigeria’s oil output and reduce costs in the sector,” the official stated. “This will lead to greater revenue generation and a more stable foreign exchange market.”
Nigeria is also looking to attract investments into the oil sector. By creating more favourable policies, such as competitive tax rates and royalties, the government hopes to bring in both foreign and local investments. This will not only improve oil production but also provide a much-needed boost to Nigeria’s foreign exchange reserves.
“Investing in oil exploration and production is crucial for both immediate revenue generation and long-term economic stability,” the source said.
Furthermore, the federal government aims to attract foreign portfolio investments through the implementation of pro-investor policies. This includes stabilising the country’s macroeconomic environment to increase investor confidence and promote the flow of capital into the Nigerian economy.
“A stable exchange rate will lower the cost of imported goods, helping to curb imported inflation,” the official added. “This, in turn, will help make goods more affordable for Nigerians.”
The combination of these measures forms a coordinated effort between fiscal and monetary authorities to stabilise the economy and reduce inflationary pressures. It is a bold move that shows a commitment to addressing Nigeria’s economic challenges head-on.
For these measures to succeed, however, the source emphasised the importance of sustained commitment to the reforms and a robust monitoring system to ensure their effective implementation.
