Market News

By Joseph Chibueze, Abuja

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has said one of the biggest challenges in the efforts to stabilise the Nigerian economy is inflation.

The minister, who stated this during a recent media interview, also noted that following the measures adopted by the government, there is a resurgence of investor confidence in the Nigerian economy.

Speaking on a wide range of issues concerning the economy, the minister, who expressed optimism over the country’s economic trajectory in 2025 and beyond, said projections provided by the International Monetary Fund (IMF), the World Bank, and other forecasters agree that growth will improve and inflation will slow, noting that in 2025, the issues around economic stability will be largely resolved.

“Perhaps the biggest issue with stabilising our economy is to reduce inflation and keep it low,” he said, adding, “We are clear that very significant progress will be achieved in this regard in the months ahead. If nothing else, we expect the downward path of fuel prices, a major element in stoking higher prices, to continue.”

Nigeria’s inflation rate has remained high for too long, fueled by rising costs of food, energy, and the fluctuating exchange rate.

Efforts by the Central Bank of Nigeria (CBN) to keep inflation down by tightening the monetary policy rate could not yield much result, as inflation maintained an upward trajectory. Throughout 2024, the CBN consistently raised the interest rate, hitting 27.50 per cent in its efforts to reduce money supply and check rising inflation, which hit 34.80 per cent in December 2024.

The rising inflation has also drained the purchasing power of the average citizen, limiting their ability to invest and contribute to economic growth.

Experts had warned that the rising inflation cannot be checked using only monetary policy measures, insisting that fiscal authorities also need to step up their game, as the major drivers of inflation, such as high food and energy prices, especially fuel, are within the control of fiscal authorities.

The minister, during the chat, acknowledged that the downward trend in the price of fuel, resulting from the combination of enhanced domestic refining capacity provided by the Dangote Refinery, stable exchange rate, and the government policy to sell crude oil to domestic refiners in naira, have all contributed to the turnaround in fuel prices. “We expect to see further reductions in the year ahead as the combination of factors above is further strengthened by additional refining capacity from government-owned refineries and the BUA Group becoming effective,” he said, noting also that the government expects a significantly slower increase in food prices to contribute to lower inflation.