Tony Chukwunyem 
…as December rate projected to hit 40.12%
The disturbing surge in inflation has continued to attract varied projections as analysts combine government reforms and other economic developments to project rates.
Over the weekend, Nigerian Economic Summit Group (NESG)-Stanbic IBTC Business Confidence Monitor (BCM) report forecast that the country’s inflation could fall to 27.1 per cent by December 2025.
This position came just Financial Derivatives Company (FDC) also projected that December 2024 food inflation is likely to peak at 40.12 per cent.
According to the Nigerian Economic Summit Group (NESG)-Stanbic IBTC Business Confidence Monitor (BCM) report, while headline inflation will remain high through September 2025, it is likely to dip below 30.0per cent in the final quarter as the effects of high petrol prices gradually ease off.
The report said: “We expect headline inflation to remain sticky in 9M:25 but settle below 30.0 per cent from September 2025 as high petrol cost gets smoothened out of the year-on-year headline inflation, barring any unexpected negative shocks to petrol prices.
“This expectation, in addition to our prognosis on the USD/NGN pair, fiscal deficits, and food supplies, informs our forecast that the headline inflation may average 30.5 per cent y/y in 2025 and settle at 27.1 per cent by December 2025.”
The anticipated easing of inflation, according to the report, is likely to make the Central Bank of Nigeria’s (CBN) Monetary Policy Committee adopt a more accommodative stance in late 2025.
It stated: “In our view, this could induce the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to switch to an accommodative monetary policy stance in late 2025.
A relatively lower headline inflation in H2:24 should support consumer spending, and business activity should also improve as the impact of the government’s two flagship policies (FX liberalisation and fuel subsidy removal) subsides.”
The report also projects that the Nigerian economy is likely to grow at 3.5 per cent year-on-year in 2025, up from an estimated 3.2 per cent in 2024, bolstered by improved macroeconomic conditions and moderated inflation rates.
Additionally, the report highlighted signs of recovery in business activity in December 2024, driven by festive demand. The Current Business Performance Index rose to +0.77, marking the first positive reading since September 2024 and a significant improvement from the -2.74 recorded in November.
Agriculture emerged as the best-performing sector with a net balance of +13.93, fuelled by increased harvests and demand for agricultural products. Nonmanufacturing industries also showed resilience, recording a net balance of +5.80.
However, the manufacturing, trade, and services sectors faced notable challenges. Despite a slight decline in the Future Business Expectation Index, from +33.17 in November 2024 to +28.61 in December, the report indicated cautious optimism about improved economic conditions in early 2025, particularly in agriculture, manufacturing, and non-manufacturing sectors.
According to FDC, Nigeria’s food inflation rose to 40.12 per cent in December compared with 39.93 per cent in the previous month, Financial Derivatives Company (FDC) has predicted.
The firm, which made the prediction in a report released, over the weekend, said that the increase in Nigeria’s food inflation last month was odd given that data released by the Food and Agriculture Organisation (FAO), shows that global food prices declined by 2.1 per cent in 2024.
Furthermore, the FDC said that despite petrol price falling by 12.2per cent to N935/litre and the exchange rate stabilising at the parallel market at N1,665/$1, it forecasts that headline inflation jumped by 0.70 per cent to 35.30 per cent in December from 34.60 per cent in November.
The firm, which also projected that core inflation rose to 29.25 per cent in December from 28.75 per cent in the previous month, said that the upward trend in inflation, “reflects the persistence of underlying price pressures across key sectors, including housing, healthcare, and transportation.”
It added: “Strangely, our food inflation is forecasted to rise to 40.12 per cent from 39.93 per cent, even as global food prices decline by 2.1 per cent in 2024, according to the Food and Agriculture Organization (FAO).
This divergence highlights the localised nature of Nigeria’s inflation crisis, driven by factors such as supply chain inefficiencies, insecurity in foodproducing regions, and currency volatility.
