Abia said it is impossible to reduce inflation to 15 per cent next year when crude oil production is below 2 million barrels per day.
President Bola Tinubu presents the 2025 budget proposal to members of the National Assembly on Wednesday, December 18, 2024 in Abuja. Photo credit: Presidency
A policy analyst, Basil Abia, says the projections of the 2025 budget proposal presented by President Bola Tinubu at the National Assembly are unrealistic.
In his presentation to a joint session of the National Assembly on Wednesday, President Tinubu said the budget aims to bring down inflation from its current 34.6 per cent to 15 per cent next year.
But speaking on Channels Television’s Politics Today hours after Tinubu’s budget presentation, Abia said it is impossible to reduce inflation to 15 per cent next year when crude oil production is below two million barrels per day.
“The projections are not realistic and the most important thing I think Nigerians should understand is what are the assumptions driving those projections. Now, if you say you want to do 15 per cent headline inflation rate on aggregate for 2025, the core drivers, you have to be able to show us that you are going to realistically drop down those drivers, reduce their efficacy, and their frequency.
“Unfortunately, you cannot do 15 per cent headline inflation rate when you are producing less than less than two million barrels per day. Now, I know they are projecting two million barrels per day, but it is impossible to do when you are currently producing 1.5 million barrels per day,” Abia said.
‘Dampening hope of exchange rate reduction’
The President also said that the exchange rate will improve from approximately N1,700 per dollar to N1,500.
However, the Director General of the Abuja Chamber of Commerce and Industry, Chijioke Ekechukwu, who also appeared on the programme, berated the President for giving the impression that he could not bring the exchange rate lower than N1,500.
“If you look at the projections made, first of all, I started getting worried when I saw that the exchange rate was projected at N1,500. That exchange rate is to tell Nigerians that there is nothing we plan to do that will bring the exchange rate lower because Nigerians are still thinking that probably that rate can still come lower than N1,500, maybe N1,000.
“There is a problem with that projection because you are dampening our hope of a reduction in the exchange rate. All you are telling us is, ‘Yes, the exchange rate is meant to remain here,” Ekechukwu said.
Tinubu listed highlights of the N49.7 trillion budget to include defence and security – N4.91tn, infrastructure – N4.06tn, health – N2.4tn, and education – N3.5tn, among others.
