Bismarck Rewane, the Managing Director of Financial Derivatives Company Limited, recently weighed in on President Bola Tinubu’s ambitious goal to cut Nigeria’s inflation rate to 15% by 2025, calling it “aspirational” and “bullish” – judging by his words, this is definitely not an endorsement. He made this assertion during an appearance on Channels Television’s Business Morning segment.
To put this into perspective, during his budget presentation to the National Assembly on December 18, 2024, President Tinubu unveiled his budget for 2025, featuring a forecasted inflation drop from the current 34.6% to a more “manageable” 15%. While this is certainly an optimistic goal, Rewane, looking at the current realities of the country is of a different opinion. He flatly stated that such a target is not grounded in the realities of Nigeria’s current economic sector. “The target is an aspiration; the reality that we think is inflation could reduce from approximately 35% to somewhere like 27% or 25%, but a 15% rate on inflation is very bullish and aspirational,” he said. He went on to add that, while the big targets are nice, the real world doesn’t always play along, emphasizing that he would be more inclined to bet on a 27% to 25% range than on such a wildly optimistic scenario.
Let’s look at the situation properly, a 15% inflation target isn’t just a small stretch, it’s a massive leap from the current economic climate. When Tinubu took office in May 2023, Nigeria’s inflation rate was at 22.41%. Fast forward to November 2024, and that figure rose to a 34.6%, more than a 12% increase. This sharp rise in inflation has been widely attributed to the President’s twin policies: the removal of the petrol subsidy and the unification of forex rates. In essence, these policies have set the stage for inflation to rise beyond control, so tell me, what policy does he want to implement that would make Inflation drop to 15%.
Rewane take is a reality check, does Tinubu want to perform magic? unless adequate measures and policies are put in place those betting on the 15% target should prepare themselves for the possibility of a rather rude awakening, and this is definitely not about prophesying doom. Magic won’t fix this.
