Nigeria is aiming to reduce its inflation rate to low single digits by the end of 2027, a move intended to trigger a sharp reduction in interest rates and lower the cost of borrowing for businesses and the government. Finance Minister Taiwo Oyedele outlined the target on Monday, framing it as a critical step toward unlocking sustainable growth in Africa’s most populous economy.
Speaking at the Nigeria Economic Summit, Oyedele highlighted the current imbalance in the nation’s financial landscape. He noted that while the economy is currently growing at a rate of 4.43%, the cost of borrowing is hovering near 30%. The minister argued that achieving single-digit inflation would allow for a fundamental shift in how the country finances its development and supports private sector expansion.
The policy roadmap comes at a high-stakes moment for the administration. Nigeria’s headline inflation is currently stalled around 15%, with the central bank’s benchmark interest rate set at 23%. These figures have maintained intense cost-of-living pressures on households just months before a national election is scheduled to take place.
Since President Bola Tinubu assumed office in 2023, his administration has implemented a series of aggressive economic reforms, including the removal of fuel subsidies and the devaluation of the naira. While these measures have succeeded in boosting public finances, strengthening foreign reserves, and restoring some measure of investor confidence, they have also contributed to the most severe cost-of-living crisis Nigeria has seen in decades.
Oyedele defended the government’s direction, stating that the reforms are already yielding benefits, though he acknowledged the need to accelerate those gains. He emphasized that the ultimate goal is to ensure that household incomes rise at a faster pace than prices.
Addressing the significant public and political pushback against recent economic shifts, Oyedele stated that policymakers remain open to adjusting their strategy if evidence shows specific measures are ineffective. However, he urged critics to engage with the technical details of policy rather than relying on emotional responses or incomplete narratives.
By targeting a single-digit inflation environment within the next three years, the government hopes to create a more stable environment for investment. Lowering the benchmark rate from its current 23% would likely be a prerequisite for the cheaper borrowing the minister described, provided the central bank finds the inflationary environment sufficiently cooled to ease its tight monetary stance.
