By Naomi Sharang, with Expert Analysis
President Bola Tinubu, presenting the 2026 Appropriation Bill—dubbed the “Budget of Consolidation, Renewed Resilience and Shared Prosperity”—announced a significant milestone: Nigeria’s headline inflation rate has fallen to 14.45% in November 2025. This marks a dramatic decline from the 24.23% recorded in March of the same year, representing nearly a 10-percentage-point drop within eight months.
“I am encouraged that our administration’s reform efforts are already yielding measurable results,” President Tinubu stated before a joint session of the National Assembly. The data presented paints a picture of an economy responding to a series of difficult policy shifts initiated since mid-2023.
Decoding the Disinflation Trend
The President highlighted that inflation has “moderated for eight consecutive months.” This sustained decline is critical. Economists note that a single month’s drop could be an anomaly, but a multi-month trend suggests underlying structural factors are at play. Tinubu attributed the progress to:
- Stabilising Food and Energy Prices: This points to potential improvements in agricultural supply chains and relative stability in the global oil market, which affects domestic fuel costs.
- Tighter Monetary Conditions: This is a direct reference to the Central Bank of Nigeria’s (CBN) aggressive monetary policy tightening, which has seen repeated hikes in the Monetary Policy Rate (MPR) to curb money supply and cool demand-pull inflation.
- Improving Supply Responses: This suggests that businesses and producers are gradually adapting to the new economic environment, potentially increasing local production to meet demand.
“We expect the dis-inflationary trend to persist,” Tinubu projected, “barring major supply shocks.” This caveat is crucial, acknowledging that external factors like global commodity price spikes or domestic security challenges affecting farmland could reverse gains.
Broader Economic Indicators: Beyond Inflation
The President’s address wove the inflation story into a broader narrative of economic stabilization:
- GDP Growth: The economy grew by 3.98% in Q3 2025, a slight acceleration from 3.86% in Q3 2024. This indicates that the fight against inflation is not cratering economic activity—a delicate balance policymakers strive to achieve.
- Oil & Non-Oil Revenues: Improved oil production, aided by security and technology, is bolstering state coffers. More significantly, Tinubu emphasized growth in non-oil revenues through “better tax administration—not excessive taxation.” This is a key distinction aimed at reassuring businesses and citizens that the revenue drive focuses on efficiency, not just higher rates.
- Investor Confidence & Reserves: Renewed capital inflows and private-sector participation signal growing international and domestic confidence. The most tangible evidence of this is the external reserves rising to a seven-year high of approximately $47 billion, providing a robust buffer exceeding 10 months of import cover. This strengthens the Naira’s defensive position against external shocks.
Context and Challenges: The Road to “Shared Prosperity”
While the numbers are promising, analysts urge a nuanced reading. The decline from a 28-year high of over 28% in mid-2024 is a positive correction, but 14.45% remains far above the CBN’s preferred target band (6-9%). The cost of living is still rising, albeit at a slower pace.
The President’s concluding remark frames the next phase: “These outcomes are not accidental. They reflect difficult but deliberate policy choices. Our task now is to consolidate these gains—so that stability becomes prosperity and prosperity becomes shared prosperity.”
This sets the stage for the 2026 budget. The challenge is to transition from macroeconomic stabilization measured by metrics like inflation and reserves to microeconomic impacts felt by the average Nigerian—increased purchasing power, job creation, and poverty reduction. The “Budget of Consolidation” will be judged on its ability to translate these high-level gains into tangible, shared prosperity for the population.
Edited by ‘Wale Sadeeq | Source: NAN
