Nigeria could achieve an inflation rate of about 13 per cent if key macroeconomic conditions fall into place, according to an investment expert.
A leading Investment Associate at AAG Capital said the country’s “bull case” inflation outlook depends largely on sustained stability in the foreign exchange market and a significant increase in domestic food production.
Speaking during an interview on ARISE TV while analysing Base, Bull and Bear Naira forecasts, the analyst explained that a stable and stronger Naira, alongside improved security in major agricultural belts, could help rein in prices and slow headline inflation by the end of the year.
She noted that the recent rebasing of the Consumer Price Index (CPI) has introduced short-term volatility into inflation data, describing it as largely a statistical issue. To address this, the National Bureau of Statistics (NBS) has announced plans to publish two sets of inflation reports — raw figures reflecting the spike and a normalised version for comparison — in the interest of transparency.
According to her, the inflation outlook can be grouped into three scenarios. The base case assumes inflation moderates to about 14.6 per cent, with the Naira holding around ₦1,450 to the dollar, continuing the stabilisation trend seen previously. The more optimistic bull case projects inflation easing further to 13 per cent, contingent on a sharper currency appreciation to around ₦1,300 to the dollar. On the other hand, a bear case scenario could see inflation climb to 16 per cent if insecurity and geopolitical tensions disrupt agricultural production.
She stressed that national security and food supply are central to reducing the cost of living, noting that a rebound in farming activities would ease supply pressures and support disinflation.
The analyst added that without stability in food production, efforts to push prices lower would be difficult to sustain, regardless of fiscal or monetary interventions.
She also observed that monetary authorities are currently adopting a cautious, wait-and-see approach, with future interest rate decisions expected to depend on how inflation trends after adjustments related to the CPI rebasing are fully reflected in official data.
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