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Nigeria could achieve an inflation rate as low as 13 per cent by 2026 if critical macroeconomic conditions—particularly currency stability and food supply—align, a financial expert has said.
A leading Investment Associate at AAG Capital, Oyinkansola Aregbeseola, said the optimistic outlook remains achievable under what she described as a “bull case” scenario, driven by sustained foreign exchange stability and a rebound in domestic agricultural production.
She made the remarks on Thursday while speaking on the Base, Bull and Bear Naira Forecast during an interview aired on ARISE TV, monitored by our correspondent.
FX Stability, Food Security Crucial
Oyinkansola explained that although the 2024 rebasing of the Consumer Price Index (CPI) has introduced short-term volatility into inflation data, underlying economic trends point to possible price stability if the naira continues to strengthen.
Analysts, she noted, project that a firmer naira—potentially appreciating to ₦1,300/$—combined with improved security across key farming regions, could significantly reduce headline inflation by the end of the year.
CPI Rebasing and Data Transparency
Addressing concerns over December’s inflation figures, Oyinkansola said the National Bureau of Statistics (NBS) is dealing with a temporary “statistical issue” arising from the CPI rebasing.
To enhance transparency and public confidence, the NBS has pledged to publish two inflation reports—one reflecting the raw post-rebasing data and another presenting normalised figures for comparison.
“The majority of participants are aware that this is primarily a statistical issue… the NBS announced they are going to release two different reports to try and normalise those numbers. I think this is welcome, for the sake of transparency,” she said.
Three Inflation Scenarios for 2026
According to Oyinkansola, Nigeria’s inflation outlook for the year falls into three broad scenarios:
- Base Case: Inflation moderates to 14.6%, with the naira stabilising around ₦1,450/$, reflecting trends seen throughout 2025.
- Bull Case: Inflation declines further to 13%, contingent on a sharp currency appreciation to ₦1,300/$ and stronger supply-side conditions.
- Bear Case: Inflation rises to 16%, driven by heightened geopolitical risks and persistent insecurity disrupting food production.
She stressed that national security remains a decisive factor in controlling the cost of living, as food supply plays a central role in easing inflationary pressures.
Security, Agriculture and Price Stability
Oyinkansola emphasised that achieving the 13 per cent inflation target will depend heavily on tangible improvements in security, particularly in Nigeria’s major food-producing belts.
Without a sustained recovery in agricultural output, she warned, price reductions would be difficult to maintain, regardless of monetary or fiscal policy measures.
CBN in ‘Wait-and-See’ Mode
As inflation data undergo technical adjustments following the CPI rebasing, the Central Bank of Nigeria (CBN) is closely monitoring developments before making further policy decisions.
According to Oyinkansola, monetary authorities are currently adopting a “wait-and-see” approach, with future interest rate decisions hinging on how inflation behaves once normalised data becomes fully established.
