Recent inflation figures have raised concerns among economists and policymakers, with renowned financial expert Bismarck Rewane, Managing Director of Financial Derivatives Company (FDC), warning that the persistent rise in prices reflects deeper structural problems in the Nigerian economy.
Speaking on Business Morning on Channels TV on Monday, Rewane pointed to the latest inflation figures, which showed a worrying uptick in both core inflation and month-on-month inflation.
“If you look at the last inflation numbers, core inflation increased, and month-on-month inflation increased dramatically. This means that there are structural issues that need to be taken care of,” he said.
The latest Consumer Price Index and Inflation report from the National Bureau of Statistics (NBS) reveals that Nigeria’s inflation rate fell to 23.18% in February 2025, down from 24.1% in January 2025.
Structural Inflation: A Looming Threat
Rewane emphasized that when structural inflation becomes entrenched in an economy, the transition from moderate to high inflation can happen swiftly. Structural inflation arises from deep-rooted inefficiencies such as supply chain disruptions, energy shortages, poor infrastructure, and fiscal imbalances—factors that Nigeria has struggled with for years.
“Once structural inflation is entrenched in a country, it doesn’t take long before you can switch from a moderate inflation level to a higher inflation level,” he noted.
Productivity as a Key Solution
The economist, however, suggested that addressing these bottlenecks could reverse the trend. He stressed that improving productivity—particularly in agriculture, manufacturing, and critical infrastructure—would help stabilize prices in the medium to long term.
“But once your productivity begins to increase significantly because of these bottlenecks…you’ll see the effects,” Rewane stated.
Experts predict inflation deceleration
According to the February 2025 Afreximbank Research Monthly Developments in the African Macroeconomic Environment report, Africa’s average inflation rate is forecasted to decrease from 8.6% in 2024 to 7.2% in 2025.
- The report also explains the impact of a strong US dollar on African currencies in early 2025, which has been fueled by concerns over trade wars and geopolitical uncertainty.
- Many economies heavily reliant on imports and external debt are grappling with increased costs of goods and rising debt burdens.
- However, countries like Angola and Morocco have shown resilience, supported by sound economic fundamentals, robust foreign exchange reserves, and effective policy measures.
Dr. Muda Yusuf, CEO of the Centre for Protection of Private Enterprises (CPPE) projected a potential further decline in Nigeria’s inflation rate in 2025, citing a combination of government policies and improving macroeconomic conditions.
