Economist urges Government to address economic distortions to lower inflation in 2025

An economist, Prof. Sherifdeen Tella, has urged the Federal Government to move beyond tackling the structural challenges in the economy to reduce the inflation rate in 2025.

Tella, Head of Economics Department, Olabisi Onabanjo University (OOU), said this in an interview with the press  in Lagos, on Friday.

He emphasised that the government should be all-encompassing in addressing the economic distortion triggering the rising inflation.

“The apex bank should be more innovative and consider reviewing downward the rate increase for the manufacturing sector.

“The current interest rate is stifling and discouraging the enhancement of the productive sectors of the economy,” Tella said.

He stressed that the government should be ingenious and decisive in addressing the depreciating level of the naira partially responsible for the current soaring inflation rate.

“The government should incentivise and encourage domestic production of commodities in order to reduce its importation.

“Especially in refined petroleum chemical plants and the fabrication of heavy machinery so as to manage the pressures on the external reserves,” Tella said.

He noted that the government could reintroduce electricity subsidies to ameliorate the cost of domestic production.

Similarly, Mr Chris Nemedia, Former Director, Central Bank of Nigeria (CBN), said the government’s desire to curb rising inflation rate in 2025 was quite optimistic.

“However the government should do more in the implementation process to ensure that this plan is realisable in the long run,” Nemedia said.

Nemedia noted that the government should increase investment in mechanised agriculture and improve its environment to boost food output.

“The insecurity challenges negating food production often caused by herders and farmers crisis could be checked with improved surveillance.

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“This will ensure that more food is produced and the country could attain self sufficiency and curb its induced inflation,” Nemedia said.

He noted that the government should invest more in key infrastructure, such as modern railways to ensure the affordability of conveying farm produce to urban areas.

National Daily Newspaper reports that President Bola Tinubu highlighted some measures his government would adopt to rein in high inflation to 15 per cent in 2025.

Tinubu, during his presidential media chat said he would slow down prices that have shrunk citizens’ incomes by encouraging production for local consumption.

He also identified supporting imports and giving “reasonable” levels of funding and assistance with low interest rates to farmers and improving the nation’s security to enable farmers to return to their farms.