Analysts have projected that Nigeria’s headline inflation for March 2025 will likely remain flat or moderate slightly, hovering around the February figure of 23.18%.
This is premised on a mix of favourable base effects, food price stability, and relative calm in the FX and fuel markets, offset by lingering cost pressures.
Industry experts who spoke to Nairametrics say the March inflation reading will be influenced by opposing forces—some exerting upward pressure while others offer relief—resulting in a relatively stable outcome.
What analysts are saying
Head of Research at Norrenberger, Samuel Oyekanmi, projects headline inflation for March to “remain relatively stable around the February level of 23% [month-on-month annualised],” citing a balance between moderating and upward factors.
“The continued effect of rebasing and favourable base effects are expected to exert a moderating influence,” he said. However, he cautioned that the depreciation of the naira in the second half of March and the increase in petrol prices could raise costs across transport and goods. “Overall, we anticipate a gradual easing in headline inflation in the near term.”
In agreement, MD/CEO of Arthur Steven Asset Management, Olatunde Amolegbe, echoed the view of near-term stability, noting that “food prices are stable or even declining in some instances, and energy prices are relatively stable in large parts of the country.”
He added that with the exchange rate holding steady for most of March, the inflation rate is likely to print flat or rise by a modest 25 to 50 basis points. “That should give the monetary policy authorities the impetus to start to consider the lowering of interest rates,” Amolegbe noted.
MD of Optimus by Afrinvest, Ebo Ayodebi, also expects a moderate outcome for March inflation, supported by “a high base effect and stability in FX and fuel prices in the first half of the month.” He suggested that while pressures persisted in some sectors, especially in the second half of the month, the overall effect would be offset by earlier stability and statistical base effects.
Key factors driving March inflation expectations
- Food Price Stability: Analysts observed that prices of major staples remained largely flat or trended downwards in many parts of the country during the month, easing pressure on food inflation—the largest component of the CPI.
- Exchange Rate Stability: For most of March, the naira held firm following February’s gains. A stable exchange rate helped slow imported inflation, although naira depreciation towards the end of the month could still influence the final outcome.
- Fuel Price Adjustments: Petrol prices remained steady in early March but recorded a slight surge towards the end of the month, introducing potential cost pass-throughs in transport and logistics.
- Rebasing Effects: The rebasing of inflation weights and methodology introduced earlier by the National Bureau of Statistics continues to play a role in recalibrating inflation readings downward, at least in the short term.
Expectation for April
- Increase in landing cost of imported petrol: one key concern is the increase in the landing cost of imported petrol, which rose by N88 per litre, from N797 to N885 toward the end of March. This uptick was attributed to a surge in importation of commodity and could translate into higher pump prices nationwide in April—further stoking transport and energy-related inflation.
- Depreciation of Naira: additionally, the naira suffered another sharp depreciation in early April, crashing to N1,600/$1 at the official market. This marked the weakest level since December 4, 2024, and followed the imposition of a 14% tariff by the Trump administration on Nigeria’s exports to the US. The FX decline heightens the risk of imported inflation, particularly on food, fuel, and other essential commodities.
Together, these developments signal a likely upward adjustment in inflation for April, reversing some of the temporary stability observed in March.
Nairametrics will provide detailed insights once the inflation figures are officially released.
