Taiwo Oyedele Predicts Inflation Drop by 2025
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, expressed optimism about Nigeria’s inflation trajectory for 2025. He predicted a significant drop in inflation from the average rate of 34.80% in 2024 to 15% by 2025.
Speaking at the PwC & BusinessDay Executive Roundtable on Nigeria’s 2025 Budget and Economic Outlook, Oyedele emphasized the potential impact of structural reforms. The event, themed Insights and Strategies for Navigating Nigeria’s Economic, Fiscal, and Policy Landscape in 2025, was held on Thursday in Lagos.
“I hear people say 15% inflation is not possible, but I disagree. If 2025 is as challenging as 2024, inflation will nominally drop to 25% due to the base effect. However, I believe the reforms in place will limit key inflationary factors, paving the way for even lower rates,” Taiwo Oyedele asserted.
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Factors Driving 2024 Inflation
Oyedele identified three major factors responsible for the inflation spike in 2024: foreign exchange volatility, the removal of fuel subsidies, and high-interest rates.
“Foreign exchange volatility was the biggest driver, with rates jumping from ₦900 to about ₦1,600 and even peaking at ₦1,900 at one point. Fuel subsidy removal and high non-performing loans also compounded the situation,” he explained.
Despite these challenges, Oyedele shared a more favorable outlook for 2025. “These three major factors will have a limited impact in 2025, if at all. With the government’s commitment to not printing new money and implementing fiscal discipline, inflationary pressures are expected to ease,” he added.
Oil Production and Economic Stability
Taiwo Oyedele acknowledged gradual improvements in Nigeria’s oil production, which currently stands at 1.8 million barrels per day. He noted, “We are close to the target of two million barrels per day. While I’m more concerned about oil prices than volume, the investments in the sector should bring some stability.”
Addressing Economic Hardships
Oyedele recognized the hardships Nigerians are experiencing due to recent reforms. “It is honestly very painful what Nigerians are going through. The removal of subsidies and FX reforms have been tough, but they were necessary. For the first time, we’re allowing market forces to determine prices, which has brought transparency,” he stated.
Government Efforts to Improve FX Liquidity
Highlighting government efforts to address foreign exchange issues, Oyedele revealed that approximately $20 million is saved daily due to improved policies. He also noted, “With tax reforms, we expect an additional $4 billion to be removed from the FX market annually.”
Optimism About the Naira’s Value
Concluding his remarks, Oyedele expressed confidence in the naira’s recovery. “I don’t believe ₦1,500 is the fair value of the naira. It is undervalued, and as liquidity improves, we should see a recovery,” he said.
Resilience and Patience Needed for Recovery
Taiwo Oyedele’s analysis underscores the importance of resilience and patience as Nigeria works toward economic recovery and stability. His insights point to the possibility of a brighter economic future shaped by disciplined policies and strategic reforms.
