The federal government has unveiled its strategy to reduce inflation from the current 34 percent in 2024 to a targeted 15 percent by the end of 2025.
This was disclosed by a source at the Budget Office of the Federation deeply involved in the 2025 budget preparations.
The source identified four key measures embedded in the Federal Government of Nigeria (FGN) Budget 2025.
One of the cornerstone strategies involves enhanced security measures across the country in 2025. The source explained that improved security is expected to facilitate a bumper harvest by ensuring farmers can safely cultivate and transport their produce. This development will drive down food prices, reducing the nation’s dependency on food imports.
“The food segment has a significant influence on the overall inflation rate,” the source remarked. The Central Bank of Nigeria (CBN) has long advocated for this approach, urging fiscal authorities to prioritize agricultural security as a critical lever to combat inflation.
The federal government also plans to leverage increased local refining capacity to tackle inflation. With the anticipated commencement of domestic production of refined petroleum products, the demand for foreign exchange (forex) to import these products will decline.
“Beyond saving forex, the export of surplus refined products will boost foreign exchange earnings, further stabilizing the naira,” the source stated. This strategy is expected to address one of the primary drivers of inflation—currency depreciation.
Another key initiative is optimizing Nigeria’s oil production and reducing upstream production costs. The government is targeting a significant increase in crude oil output alongside improved cost efficiencies within the oil and gas sector.
According to the Budget Office of the Federation official, “The Federal Government can achieve a significant increase in crude oil output and improve cost efficiencies in the oil and gas sector by addressing pipeline vandalism and crude oil theft through the deployment of advanced surveillance technologies such as drones and satellite monitoring. Additionally, fostering collaboration with host communities by providing incentives and developmental projects will help secure oil installations and reduce disruptions.”
In 2025, attracting investments into oil exploration and production is another vital strategy the federal government hopes to pursue. By implementing investor-friendly policies, such as competitive royalties and tax regimes, the government hopes to draw foreign and local investors into the sector.
“These measures will enhance revenue generation and boost the nation’s foreign exchange reserves,” the source noted. This approach is expected to strengthen macroeconomic stability and create a ripple effect across other sectors of the economy.
The government plans to aggressively attract foreign portfolio investments in 2025 by encouraging macroeconomic stability and implementing investor-friendly policies. The anticipated surge in foreign portfolio inflows will increase the supply of forex, easing pressure on the exchange rate.
“A stabilized exchange rate will lower imported inflation, making goods more affordable for Nigerians,” the source added.
The outlined measures reflect a coordinated fiscal and monetary policy effort to address the structural and external factors driving inflation. The Central Bank of Nigeria’s persistent calls for fiscal interventions to complement monetary policies appear to be gaining traction.
The FGN Budget 2025 presents a comprehensive roadmap for economic stabilization and growth. If successfully implemented, these strategies could mark a significant turning point in Nigeria’s battle against inflation, offering relief to millions of citizens grappling with rising costs of living.
The Budget Office source maintained that achieving the inflation reduction target requires sustained commitment to these reforms, alongside robust monitoring and evaluation mechanisms.
