The Independent Media and Policy Initiative forecasts that Nigeria’s inflation rate will drop to 17 per cent by December 2025, driven by continued disinflation.
According to IMPI Chairman Dr. Omoniyi Akinsiju, Nigeria recorded a rare disinflation in 2025, with inflation falling from 24.5 per cent in January to 20.12 per cent in August, representing a 17.5 per cent drop.
IMPI attributes the decline in headline inflation to three key factors: the Central Bank of Nigeria’s decision to keep interest rates at 27.50%, which has slowed credit demands and speculative forex activities; a stable foreign exchange rate due to increased foreign exchange inflow; and better harvests and relative calm in food-producing regions, which have eased food price pressure.
“We have observed how some critics have dismissed the decline in the inflation rate as being of no consequence to the people, insisting dismissively that prices have not changed in any way to affect the mass of the Nigerian people. We consider this an expression of the intention not to acknowledge the federal administration’s positive strides,” Akinsiju said.
IMPI projects that the Central Bank’s Monetary Policy Committee will consider easing the current 27.50% monetary policy rate by at least 50 basis points at its next meeting and by at least 200 basis points by December 2025.
Additionally, IMPI expects a review of the cash reserve ratio from 50% for bank deposits to 35% by December 2025, which will impact the cost of production, enhance business expansion, and create jobs.
The think tank also noted the rebound in the fortunes of some of Nigeria’s largest businesses after they had suffered losses following the Federal Government’s decision to float the naira.
“The seven companies that had reported a combined loss of N418 billion in Q1 2024 returned to a combined pre-tax profit of N289.8 billion in Q1 2025. By the end of Q2 2025, all the consumer goods companies had returned to profitability with a combined pre-tax profit of about N264 billion,” IMPI stated.
