FG targets single-digit inflation by 2027 as Oyedele links low

The Federal Government is targeting single-digit inflation before the end of 2027, a move Finance Minister Taiwo Oyedele says could create room for lower interest rates, cheaper business financing and faster economic growth.

Oyedele announced the target at the 32nd Nigerian Economic Summit in Abuja, arguing that the benefits of the government’s foreign exchange and petrol subsidy reforms should ultimately be reflected in lower living costs and improved access to finance.

“Before the end of next year, we want to go to single digits so that it can create the condition for single-digit interest rates,” he said.

He contrasted Nigeria’s current economic growth with the high cost of borrowing, saying the economy could perform significantly better if businesses had access to affordable credit.

“If we are growing at 4.43 per cent, borrowing at close to 30 per cent, imagine what is possible when you borrow at single digit?” he added.

The target presents a major test for the government’s economic programme. While inflation has eased in recent months, bringing it below 10 per cent would require a further substantial reduction in price pressures, alongside monetary conditions that permit lending rates to fall.

Nigeria’s headline inflation declined to 14.63 per cent in September 2026 from 15.39 per cent in August, marking the fourth consecutive monthly slowdown, according to the figures cited in the report.

The gap between inflation and borrowing costs remains a concern for businesses, particularly manufacturers, small and medium-sized enterprises, and other firms that depend on bank credit to finance inventories, equipment and expansion. High lending rates raise operating costs, constrain investment and can ultimately feed into the prices of goods and services.

Oyedele said the government had directed savings from foreign exchange and petrol subsidy reforms towards measures intended to cushion the impact of the changes on households and businesses. These included salary increases, pension arrears payments and subsidised credit for small businesses.

He maintained that the effects of the reforms should not be judged solely by headline growth figures, but also by whether Nigerians were gaining better access to economic opportunities and support.

The minister had previously argued that achieving single-digit inflation could save the government more than $10 billion by reducing the cost of borrowing and easing pressure on public finances.

Lower inflation and interest rates could improve the government’s debt-service position while giving businesses greater scope to invest, expand production and employ more workers. However, the benefits would depend on how quickly borrowing costs respond to falling inflation and whether credit becomes more accessible to productive sectors.

The government has not outlined a detailed timetable or specific additional measures for reducing inflation from September’s 14.63 per cent to single digits by the end of 2027.

The ambition is therefore clear, but its economic significance will depend on delivery. Sustained price moderation, lower financing costs and stronger private-sector investment would be needed to translate the target into measurable gains for households and businesses.