Excessive reliance on cash-based transactions is fueling Nigeria’s high core inflation, according to Charles Iyore, financial analyst, Principal Partner at Dion & Associates Ltd.
Speaking in a TV program, Iyore highlighted how inefficient cash settlements disrupt monetary policies and worsen inflation.
“Nigeria’s economy feels like a game where many are mere spectators,” Iyore noted. “Exclusion from the financial system distorts how capital is converted into currency and misapplied, leading to inflation.”
Iyore stressed the importance of transitioning to a robust monetary system with effective controls. “A sound treasury directing growth is essential. Without it, economic stability becomes impossible,” he said. He further called for a unified national economic blueprint, asserting, “Freedom doesn’t mean no boundaries. States must operate within a structured framework to avoid fiscal irresponsibility.”
State Governments Criticized for Inaction
Joining the conversation, Dr. Gbenga Adeoye, Principal Partner at Gbenga Adeoye & Co Ltd, shifted focus to state governments. Despite federal allocations exceeding N1 trillion, Adeoye criticized states for failing to address critical infrastructure needs or inflation.
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“Over 95% of states have underperformed. Some states have resources comparable to U.S. states, yet no investments in roads, power, or industries,” Adeoye said. He lamented the unchecked rise in food inflation, which now exceeds 40%, attributing it to politically motivated spending. “States are buying SUVs for directors instead of investing in infrastructure,” he added.
Federal Leadership Needed
Both experts underscored the importance of non-inflationary spending but proposed different solutions. Iyore urged the presidency to lead fiscal discipline through the 2025 budget. “The presidency must set the tone; this is our mandate to him,” he stated.
In contrast, Adeoye pointed out the autonomy of state governments, emphasizing accountability mechanisms. “While the president can provide direction, governors must independently implement policies,” he argued. “Policy without oversight is meaningless. States must be held accountable to curb inflation effectively.”
Tinubu’s 2025 Budget Projections
President Bola Ahmed Tinubu’s 2025 budget speech offered a glimmer of hope, projecting a reduction in inflation from the current 34.6% to 15% by the end of 2025. Tinubu also promised an exchange rate improvement from approximately ₦1,700 per dollar to ₦1,500.
“Our focus is not just on stabilizing the macroeconomy but on creating opportunities for Nigerians to thrive,” Tinubu said. “By enhancing infrastructure and ensuring security, we can unlock the economy’s full potential.”
Economist Ayo Teriba of Economic Associates added that reducing inflation to 5% by 2025 is possible if the government attracts $50 billion in foreign direct investment. “FDI can significantly drive down inflation while boosting growth,” Teriba explained.
Call for Unified Action
As Nigeria grapples with its inflation crisis, experts and government officials agree that a blend of monetary discipline, state-level accountability, and strategic planning is necessary. Whether these measures will yield results remains a pressing question for a nation seeking economic stability.
