Rewane Points Out Important Details in Tinubu's Proposed Budget
- Bismarck Rewane has advised the federal government to ensure efficient spending and work to improve local production
- The renowned economist called out the overambitious inflation rate target, as noted in President Tinubu's proposed budget
- He, however, hinted at the likelihood of the inflation rate increasing in December because of the festivities associated with the month
Given the current economic challenges facing Nigerians, the federal government has been advised that it would be impractical to aim for an inflation rate of 15% by the end of 2025.
This advice was given by Bismarck Rewane, a prominent economist and managing director of Financial Derivative Company (FDC), who pointed out that it would not just be aspirational but also overambitious.
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It would be recalled that Legit.ng reported that President Bola Tinubu would present the N47.9tn 2025 budget to the joint session of the National Assembly on Wednesday, December 18.
15% inflate rate target impractical - Rewane
Speaking during an interview on ChannelsTV's Sunrise Daily, Rewane argued that the inflation target of 15% outlined in the Medium Term Expenditure Framework is overly optimistic and unlikely to be achieved,
He noted that even experts have forecast inflation to stay between 25% and 28% by the close of 2025.
He said:
“This is not to preempt the budget presentation, but the inflation target of 15% as we see in the Medium Term Expenditure Framework, is overambitious. I do not think that we are going to get down to 15% inflation in the near term.
Even if inflation begins to moderate, at the end of 2025, most analysts are of the opinion that the best it will be is between 25 to 28%. So, the budget could be aspirational, it could be ambitious, but to be successful is to be realistic, and I do not think that 15% inflation is going to be achieved.”
Rewane described the exchange rate projection of N1400/$ as more realistic than the N800 projected in the last budget, adding that a growth target of 3% to 4% would be achievable if the government ensures efficient spending in 2025 and improves local production.
Rewane expects further rise in December
Rewane also commented on the recently released inflation figures from the NBS, noting that they are consistent with earlier forecasts.
He said:
“We are in an inflationary environment and this is the third consecutive monthly increase even though the rate of increase is slowing. What this means, though, is that the whole idea of seeing inflation taper towards 30% by the end of 2024 is not going to materialise.”
Rewane noted that December is typically marked by rising prices of essential and non-essential goods due to festive activities, likely leading to further inflation growth. However, he projected an inflation rate of 32-33% by early 2025.
FG targets new borrowing in 2025
Meanwhile, Legit.ng earlier reported that the federal government was expected to borrow in 2025 to finance the 2025 budget which has already been approved by FEC.
The 2025 budget was estimated to be N48 trillion and had a deficit of N13 trillion, which would be financed through borrowing.
The federal government said the 2025 budget was designed to promote fiscal sustainability, focusing on balancing government spending and encouraging the private sector.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
