The Lagos Chamber of Commerce and Industry has pointed out that if the Nigerian government can bring the foreign exchange rate down to N1,300 per dollar, it could lead to a decrease in the country’s inflation rate.
Gabriel Idahosa, the President of the LCCI, shared this insight while discussing Nigeria’s recently approved 2025 budget of N54.99 trillion and the goal to lower inflation to 15 percent.
He emphasized that stabilizing the exchange rate at around N1,300 or N1,400 per dollar, instead of the current N1,500, is the best way to tackle Nigeria’s inflation, which was at 34.80 percent in December 2024.
“If the federal government can reduce the stable exchange rate from N1,500 to about N1,400 or N1,300 as the sustainable new exchange rate benchmark, then you can see inflation coming down even more than their targets,” he mentioned.
Idahosa also highlighted that increasing exports of crude oil and petroleum products is essential for reducing inflation in Nigeria.
However, he expressed concerns that the 2025 budget may not be enough to meet the ambitious economic goals of achieving a $1 trillion economy and a 15 percent inflation rate.
“None of the budgets, either this year or next year, will be enough to achieve the broad targets of growing the economy,” the LCCI President remarked.
On Wednesday, the Nigerian Senate approved the 2025 budget of N54.9 trillion, which includes total expenditures of N54.99 trillion, statutory transfers of N3.65 trillion, recurrent (non-debt) expenditures of N13.64 trillion, capital expenditures of N23.96 trillion, debt servicing of N14.32 trillion, and a deficit-to-GDP ratio of 1.52 percent.
As of Thursday, the current exchange rate with the dollar is N1,507.88 in the official market.
Nigeria’s inflation figures for January 2025 are expected to be released this Saturday or Monday.