Nigeria’s inflation rate is expected to decline to 33.1% in Q1 2025, driven by a stable naira and slightly lower food and fuel prices, according to Bismarck Rewane, Managing Director of Financial Derivatives Company.
Thank you for reading this post, don't forget to subscribe!Speaking at the Lagos Business School (LBS) Breakfast Session titled “Nigeria in 2025: Breakthrough or Fall Through,” Rewane noted that while inflation remains elevated, a modest slowdown is anticipated by March 2025.
Nigeria’s inflation had surged to 34.8% in December 2024, continuing an upward trend after a brief moderation at the end of the year. However, analysts predict a gradual slowdown, offering relief to businesses and households grappling with high costs.
Naira Gains Amid External Reserves Decline
Rewane highlighted the drop in petrol refinery prices to N890 per litre, though consumers have yet to see a corresponding reduction at fuel stations. Meanwhile, the naira appreciated to N1,565/$1 in the street market, gaining N5 against the dollar, while remaining stable at N1,502.50/$1 on the official Nigerian Foreign Exchange Market (NFEM), according to the Central Bank of Nigeria (CBN).
Despite the naira’s recent gains, Nigeria’s external reserves have declined by $1.38 billion in 2024, standing at $39.49 billion as of February 5. Analysts attribute this depletion to the repayment of external obligations and the CBN’s interventions to maintain market liquidity.
With ongoing reforms, the naira could strengthen further, potentially reaching N1,300/$1, as projected by the Nigerian Economic Summit Group.
