By Lucy Ogalue
Abuja, Dec. 18, 2025 (NAN) – In a significant endorsement of current economic strategy, the Independent Media and Policy Initiative (IMPI), a prominent Nigerian think tank, has attributed the sustained decline in the nation’s inflation rate to the integrated package of monetary, fiscal, and structural reforms implemented by President Bola Tinubu’s administration. This analysis moves beyond surface-level reporting to examine the underlying mechanisms and data driving this cautious optimism.
In a detailed statement signed by its Chairman, Dr. Omoniyi Akinsiju, IMPI not only credits the policies but also projects a continued disinflationary trend, forecasting a year-end inflation rate of approximately 14%. This revised outlook is notably more optimistic than their initial projection of 17%.
Beyond Headlines: The Data-Driven Basis for Optimism
IMPI’s forecast is grounded in a sophisticated Predictive Regression (PR) analysis of key macroeconomic indicators. Crucially, the think tank cross-references two vital datasets:
- The Central Bank of Nigeria’s (CBN) Purchasing Managers’ Index (PMI): A leading indicator of economic health in the manufacturing and service sectors. A reading above 50 signals expansion. IMPI highlights that the CBN Composite PMI rose to 55.4 index points in October, indicating robust growth in production and productivity.
- The National Bureau of Statistics’ (NBS) Consumer Price Index (CPI): The standard measure of inflation. The analysis notes a “sharper decline” in headline inflation to 16.50% in October from 18.02% in September, a trend that continued into November with a drop to 14.45%—marking the eighth consecutive month of moderation.
The powerful correlation between a rising PMI (more economic activity) and a falling CPI (slowing price increases) is, according to IMPI, indicative of improved growth momentum coinciding with declining inflationary pressures. This combination is a key goal of economic policy, suggesting the economy may be moving towards a more stable equilibrium rather than simply contracting.
Policy Synergy: How Monetary, Fiscal, and Structural Reforms Interact
While the original report mentions these policy pillars, their interplay is critical.
- Monetary Policy: The Central Bank’s aggressive interest rate hikes aim to reduce money supply and curb demand-pull inflation. Higher rates make borrowing more expensive, slowing down consumption and investment spending.
- Fiscal Policy: Government spending priorities and efforts to boost non-oil revenue can complement monetary tightening. For instance, targeted subsidies or investments in critical infrastructure can ease specific cost pressures without fueling broad money supply growth.
- Structural Reforms: This is the long-term game-changer. Policies aimed at removing bottlenecks in agriculture, energy, and logistics address the root cause of cost-push inflation in Nigeria. Improving port efficiency, for example, directly reduces the cost of imported goods and raw materials.
The Road Ahead: Sustainability and Future Initiatives
Dr. Akinsiju expressed optimism that the disinflation trend could extend into 2026, contingent on policy consistency—a vital caveat often overlooked. He cited the imminent deployment of 2,000 tractors acquired from Belarus under a mechanisation service-provider model as a concrete example of forward-looking structural policy.
This initiative is not merely about distributing equipment; it’s a productivity intervention. By lowering the cost and increasing the efficiency of land cultivation, it aims to directly boost agricultural output. Increased supply of staple foods is one of the most effective ways to ease food inflation, which is a dominant component of Nigeria’s CPI basket. The potential outcomes, as noted, include expanded cultivated land, further easing of price pressures, and ultimately, poverty alleviation.
Context and Considerations
While IMPI’s analysis presents a positive and data-supported narrative, it is part of an ongoing economic conversation. The full impact of reforms must be weighed against persistent challenges such as exchange rate volatility, security concerns affecting agriculture, and global commodity prices. The coming months will be crucial in determining if the current moderation represents a permanent shift or a temporary respite. Nevertheless, the correlation of improving productivity metrics with falling inflation provides a tangible basis for the think tank’s credited assessment of current policies.
(NAN) (www.nannews.ng)
LCN/AIO
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Edited by Oluwafunke Ishola
