MPR stoked inflation rather than lowering it in 2024 — Taiwo Oyedele
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, yesterday argued that the Monetary Policy Rate (MPR) was a factor that pushed up inflation rather than bringing it down last year. However, Oyedele insisted that the federal government’s 15 per cent inflation target in 2025 is achievable provided that the exchange […]
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, yesterday argued that the Monetary Policy Rate (MPR) was a factor that pushed up inflation rather than bringing it down last year.
However, Oyedele insisted that the federal government’s 15 per cent inflation target in 2025 is achievable provided that the exchange rate continues to stabilise.
He spoke as a panelist at the PwC and BusinessDay Executive Roundtable on Nigeria’s 2025 Budget and Economic outlook with the theme: “Insights and strategies for navigating Nigeria’s economic, fiscal and policy landscape in 2025.”
Oyedele said the serial hikes of the MPR by the Central Bank of Nigeria (CBN) pushed up inflation thereby worsening the nation’s economic woes.
He also identified FX volatility as another major factor in the rising inflation figure.
“The MPR, as far as I’m concerned, was a factor pushing inflation up, not bringing it down because you need to finance your working capital.
“If you finance your working capital at 35% – 40 %, you will recover it. Look at manufacturers, they have unsold inventory of over N1trillion. That’s finance tied down, they will recover it,” he said.
Oyedele said with base effect, inflation is expected to decline to 25 per cent.
“You say every time that 15% is not possible. And I do understand why they’re saying it’s not possible. If you look at the average inflation for 2024, it’s 33%. If things remain as bad as they were in 2024, in 2025, nominally, inflation will be 25%.
“If you look at what were the factors that pushed inflation in 2024, FX has the biggest factor by a mile. We moved from N900, ended at about N1,600; at some point, it was N1,800, N1,900.
“I think Nigeria is one of the most resilient countries in the world. We shouldn’t be talking about 34 percent by the end of December,” Oyedele said.
In his welcome address, the Regional Senior Partner at PwC, Sam Abu, projected that 2025 economic Outlook would be better compared to last year’s.
He, however, noted that economic volatility and geopolitical tension may have an impact on the nation’s economy.
Abu said global economies are interconnected and there’s a need to constantly dissect how it affects Nigeria’s economy and strategies business need to navigate the complexities and uncertainties.
“While CEOs and business leaders remain concerned about the volatility and geopolitical tension, they’re optimistic about resilience and strategies they’re deploying for success,” he said.
Frank Aigbogun, the CEO of BusinessDay, also agreed 2025 would be a better year than 2024 economically.
He, however, tackled the governors on their proposal on the controversial tax reform bills, describing it as “cake sharing.”
Aigbogun said, “If you look at wherever the governors have proposed, it’s more about keeping the status quo and what’s the status quo?
“Whatever it is that the governor did, it’s about cake – sharing. They have forgotten that Nigeria needs to be more productive and we need to incentivise production.
“So, if you give equality, the population three times more than derivation. I think we’re just joking. And I hope we’re not going to joke here this morning.”
Olusegun Zaccheaus, Partner and Lead for Strategy and West Africa, recommended seven strategies for businesses to thrive in 2025 including reinventing business model, reigniting market play, harnessing tech, digital and AI play as well as reassessing stakeholders relationships and funding.