Tanimu Yakubu: How Tinubu Will Cut Inflation from over 34% to 15% in 2025

•Says next year will be turning point for Nigeria’s economy 

Emmanuel Addeh in Abuja

The Director General of the Budget Office of the Federation, Tanimu Yakubu, yesterday assured that despite the skepticism trailing the feasibility of slashing the current inflation rate from over 34 per cent to 15 per cent, President Bola Tinubu has clear strategies to make it happen.

Speaking on Arise Television, Yakubu who gave an overview of the proposed 2025 budget, maintained that with ongoing in-country refining of petroleum products, which hitherto was a major factor driving inflation, prices will drop in 2025.

Besides, he stated that there will be enhanced monitoring of projects even if it means the deployment of consultants to ensure that they are more cost-efficient to improve the implementation of next year’s budget.

“We used to spend as high as one-third of our foreign exchange earnings to import refined products. With Dangote Refinery coming on stream and small local refineries adding to the supply, we think this will substantially reduce the pressure on the naira,” Tanimu said.

The DG of the budget office explained that with the growing confidence in the Nigerian economy, foreign investments were being expected in 2025, while the spending in agriculture was being raised to ensure that food inflation is tamed.

“We used to spend up to 30 per cent of our foreign exchange to import refined petroleum products. With the takeoff of the Dangote refinery, certainly we’ll spend a lot less. The successes that have been recorded in reducing the number of ungoverned spaces all over the country enabled farmers to return to work, and we expect a bumper harvest this year.

“Mr. President has also decided to spend N120 billion to flood the country, in particular public hospitals, with free drugs and also to provide medicines that are particularly for indigent patients, people with life-threatening diseases like tuberculosis, HIV and the rest of them, but are unable to afford the cost of such drugs. 

“These are some of the factors that drive inflation. In particular, you also need to know that the Dangote and other refineries will not only be meeting the domestic supply gap, they are also going to be exporting refined products which will bring in additional export revenue,” he stated.

According to him, what this means is that Nigeria will have more revenue than it has ever had, while its foreign reserves which is currently at about $42 billion will rise significantly.

He pointed out that Nigeria was also doing everything to reduce the cost per barrel of crude oil production, enhancing more efficiency in crude output and making more money available.

“Mr President is disturbed that we have one of the highest costs of production in the upstream sector. He has assured us he will take every measure to ensure a substantial decrease in the cost of production, which again will bring us more foreign exchange,” Tanimu said.

He noted that with current strategies, Nigeria will exceed its target oil production quota, noting that this could hit over 2.6 million barrels per day, especially with the 130,000 bpd initial output boost expected in 2025.

“Nigeria has sufficient investment to actually drill 3 million barrels per day, but it looks like some forces somewhere have decided that the country cannot get more than 900,000 barrels per day,” he noted.

Answering a question on rebasing of Nigeria’s Gross Domestic Product (GDP), Yakubu said that it will not be out of place to do it, explaining that Nigeria has not conducted a GDP rebase in over a decade, whereas it should ordinarily be done every five years.

“We are supposed to rebase the GDP every 5 years, we haven’t done it in a decade, certainly, some of the indices that could have given us a higher level are not even sure. But the normal assumption is that those sectors that were under-assessed or even new economic activities that have not been brought into our GDP will certainly boost the GDP level. We expect the outcome to be announced very soon,” he stressed.

The former Chief Economic Adviser to late President Umar Yar’Adua attributed the rising food prices to hoarding, but pointed out that this will be corrected as agricultural harvests increase and the Nigerian currency stabilises. 

“The harvest season is ongoing and the hoarders think that scarcity will prevail, so they are hoarding, but when they see that the currency itself is firming up and that there is tangible evidence, that more food was produced this year than last year, it will be rational on their part to begin to empty their stores, and then we would see that prices are actually coming down,” he assured.

He noted that when President Bola Tinubu talks about food security not being negotiable, what he means is that security is improving and the sector will further gulp N6 trillion this year to ensure more farmers return to their farms.

“What he means is that these ungoverned spaces all over the country, in the Niger Delta creeks, in the northwest where bandits have taken over, in the northeast where we used to have very serious security challenges that undermined the farmer’s ability to go back to the farm, (are filled.)

“As we are speaking, an increasing number of those spaces have been significantly reduced. He wants to take the country to a situation whereby there is an absolute military defeat of bandits and people are able to return to work. We have seen that this is not just propaganda.

“That’s why I believe 2025 will be a turning point for Nigeria’s economic recovery,” he said, stressing that Nigeria “did not have a Tinubu in the presidency until now and  a Tanimu Yakubu in the budget office,” when reminded that Nigerians have heard the same story every year.