• Urges CBN to loosen grip on rates

Nigeria could end the year with its lowest inflation in nearly a decade, according to the Independent Media and Policy Initiative (IMPI), which has projected headline inflation to drop to 17 per cent by December 2025.
In its latest policy statement signed by Chairman Dr. Omoniyi Akinsiju, the think tank noted that the economy is experiencing one of its rare periods of disinflation, marked by five consecutive months of inflation decline.
The group, however, insists the Central Bank of Nigeria (CBN) must match this rare economic momentum by easing its restrictive monetary stance.
It urged the CBN’s Monetary Policy Committee (MPC) to begin easing the benchmark interest rate to consolidate gains.
“Empirically speaking, the Nigerian economy is now in a disinflationary dispensation. Nigeria recorded a rare disinflation in 2025, with inflation falling from 24.5 per cent in January to 20.12 per cent in August, the sharpest mid-year slowdown in over a decade”, IMPI said.
According to the group, three key factors have shaped the current inflation deceleration: the Central Bank’s decision to hold rates at 27.50 per cent, which curbed credit demand and speculative forex activities; relative stability in the foreign exchange market due to higher inflows from oil, remittances, and non-oil exports; and improved food supply following better harvests and calm in food-producing regions.
With inflation already below the Central Bank’s 21 per cent target for the year, IMPI said the momentum could push the figure down to 17 per cent by December, close to the Federal Government’s 15 per cent goal.
“Attaining this target has huge microeconomic implications,” it stressed, projecting that the MPC may cut the Monetary Policy Rate by at least 50 basis points at its next meeting and by as much as 200 basis points before year-end.
It also recommended lowering the Cash Reserve Ratio from 50 per cent to 35 per cent by December, saying this would ease the cost of credit, spur business expansion, and support job creation.
Beyond monetary policy, IMPI highlighted the recovery of Nigerian firms after steep losses triggered by the Federal Government’s 2023 decision to float the naira.
Following a sharp depreciation that saw the currency fall from N460/$ in mid-2023 to N1,535/$ by the end of 2024, several consumer goods companies—including BUA Foods, Cadbury, Nigerian Breweries, and Nestlé Nigeria—reported combined losses of over N418 billion in Q1 2024.
The think tank said the return of relative exchange rate stability, coupled with cost restructuring, has since reversed the trend.
“By Q1 2025, the same companies posted a combined pre-tax profit of N289.8 billion, and by Q2 2025, they had returned to a combined profit of N264 billion,” it noted.
IMPI argued that the sharp turnaround underscored how policy stability and market adjustments can restore investor confidence.
“This captures the context in which domestic and global commentators have returned a verdict of stability for the Nigerian economy,” the statement concluded.

…No new taxes introduced

The Federal Government says President Bola Tinubu’s administration has not introduced new taxes but has instead taken deliberate steps to reduce the tax burden on Nigerians and businesses through sweeping reforms.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, speaking on national television, said the administration’s priority is to simplify the system, grant relief to workers, and ease the burden on businesses.
He explained that from January, Nigerians earning ₦100,000 or less a month will no longer pay personal income tax. “That is above the minimum wage,” Oyedele said. “Even middle-class Nigerians earning up to ₦1.8 or ₦1.9 million annually will see reductions. Only the very high-income earners will pay slightly more, in order to protect the vulnerable.”
Businesses are also beneficiaries of the reforms. The exemption threshold for corporate income tax has been raised from ₦25 million to ₦100 million in annual turnover. “If you make up to ₦100 million a year, you don’t need to pay corporate income tax at all. It is zero percent,” he explained.
New reliefs have also been introduced to leave more disposable income in people’s pockets. For the first time, workers can deduct 20 percent of their annual rent before paying tax. Pension contributions, insurance payments, and housing savings also reduce taxable income. “We are saying that people should not be overburdened. These reliefs are deliberate measures to support workers,” Oyedele noted.
Reforms to Value Added Tax are expected to lower the cost of essential goods and services. Food, water, education, and healthcare will not attract VAT. More importantly, producers will now receive refunds on VAT incurred in production. “For example, bakers will not only sell bread tax-free, but government will also refund the VAT they pay on sugar, flour, or fuel. That means cheaper bread for Nigerians,” he said.
Another major step has been the reduction of multiple taxation. Nigeria previously had more than 60 separate levies, ranging from bicycle tax to radio and television levies. “What this government is doing is harmonising them into a single-digit number, less than 10. That will end harassment and ease business,” he assured.
Oyedele also addressed concerns about deductions on bank deposits. “Whatever is in your bank account does not translate to taxable income. It could be a loan, a gift, or money held for someone. The law is clear: you declare your income yourself. Government only validates with intelligence. Gifts will not be taxed,” he explained.
Nigerians, he added, will now be entitled to faster refunds. “If you are owed VAT refunds, government must pay you back within 30 days. That is your money. But if you make false claims, you pay a 200 percent penalty. This rewards honesty and punishes evasion,” he said.
On the petroleum tax surcharge being debated, Oyedele clarified that it was not introduced by the Tinubu administration. “This surcharge was introduced in 2007. At that time, it wasn’t implemented because government was subsidising as well,” he said. “While we were doing this reform, it wasn’t even in the original proposal. But in the process of working on the bills, it was agreed that we shouldn’t have different agencies collecting taxes. The law mandated FERMA to collect it—40 percent for federal roads, 60 percent for states. But it was never implemented.”
He stressed that the current government had only ensured the surcharge was properly captured in law for transparency and orderly implementation, not that it would be immediately imposed.
According to him, the Tinubu administration has reduced the tax burden on Nigerians by protecting low-income earners, granting relief to workers, exempting small businesses, harmonising levies, and ensuring lower prices of food and essentials through VAT reform.
“This government is not introducing new taxes. It is simplifying, harmonising, and reducing burdens. About 97 to 98 percent of Nigerians will either pay no tax or less tax under the new law. The goal is to grow businesses, protect workers, and expand prosperity,” Mr. Oyedele concluded.