Nigeria’s inflationary pressures may finally be easing, as economic indicators suggest a shift towards stability in 2025, as analysts predict inflation rates between 27% and 30%.
Speaking on Newscentral’s Business Edge on Tuesday, Senior Business Developer at Purime Africa, Daniel Effah, says he believes the country is moving into a “disinflationary era” in the first two quarters of the year.
“I feel that we’ve gotten to a point of our peak when it comes to consistent rising prices,” Effah said, adding that “Inflation is not expected to move at the same pace like it did across 2024.”
He attributes this projected decline to increasing stability in key macroeconomic areas, particularly petroleum prices and foreign exchange rates.
“Petroleum prices are stabilising. We’ve gotten a structure on who the sellers are”, he noted, adding that oil prices are expected to remain within the $70-$73 per barrel range throughout 2025.
Similarly, he noted the Naira has shown “less volatility”, suggesting a more predictable exchange rate movement.
“We’ve seen a consistent decline. We’ve seen stability, less volatility in that area,” Effah explained. “So, for me, what we would be seeing is disinflation for the first and second quarter of 2025.”
Effah’s projections suggest that Nigeria’s inflation rate could drop to 20%-22% by the end of 2025**, aided by oil market stability and forex exchange predictability.
With these factors in play, Nigeria’s inflation rate is expected to moderate as the country enters a phase of economic consolidation. While some argue that instability still looms in the oil and currency markets, Effah clarified that stability does not mean fixed prices but rather controlled volatility.
“When I say stability in the currency space or the oil sector, it is not about fixed prices. It is about the level of volatility,” he explained. “You don’t want an instrument’s price to move 5% up today and then drop 10% tomorrow. You want steady movement.”
The same applies to crude oil, where recent market behaviour suggests a consistent range despite earlier bearish movements.
“Apart from January, where we had over 10-15 trading days of bearish movement, we’ve seen consolidation and a consistent range,” he pointed out.
Looking ahead, Effah anticipates a ramp-up in crude oil production and an economic environment conducive to long-term planning.
“2025, for me, is that year where we would consolidate in terms of all the previous movements we’ve had on majority of our economic pointers,” he said.
With oil stability, controlled forex movements, and a gradual decline in inflation, Nigeria appears to be moving towards a period of economic balance—setting the stage for sustainable growth in 2026.
