The recent stability of the naira and mildly lower food and fuel prices should taper inflation to 33.1 per cent in the first quarter, according to Bismarck Rewane, managing director of Financial Derivatives Company.
Rewane in a presentation at Lagos Business School (LBS) Breakfast Session titled: “Nigeria in 2025: Breakthrough or Fall through,” said inflation is expected to drop in the months to March 2025 although modestly.
“In Q1’25, inflation is projected to ease marginally towards 33.1 per cent, reflecting a stable Naira and fairly lower food and fuel prices,” Rewane said.
Nigeria’s skyrocketing inflation soared to 34.8 percent in December 2024, extending its rise after a brief moderation end-2024.
But many analysts see prices slowing this year, ushering a breather for both corporates and households that have had a tumultuous year with rising prices.
Rewane revealed that the price of petrol at the refinery has dropped to N890 per litre, adding that consumers are yet to see a corresponding reduction at the pump despite the fall.
The economist said the gains seen so far on the stability of the naira is “good news”.
He however noted the over a month continued decline in Nigeria’s external reserves which has shed $1.38 billion so far this year, reaching $39.49 billion as at February 5.
Analysts say the depletion of the foreign reserves could be linked to the repayment of external obligations owed by the federal government and the Central Bank of Nigeria’s efforts to ensure liquidity in the market.
The CBN’s measures are however yielding tangible results as the naira appreciated to N1,565 on Friday on the street, gaining N5 against the dollar, which traded at N1,570 the previous day.
Meanwhile, in the Nigerian Foreign Exchange Market (NFEM), the naira remained stable, closing at N1,502.50 per dollar on Friday, almost unchanged from the previous day’s N1,502/$1, according to data from the Central Bank of Nigeria (CBN).
With its rate of appreciation, the naira may be on course to reach levels projected by the Nigerian Economic Summit Group at N1,300 per US dollar on sustained reforms.
