In a recent Reuters poll, it’s been forecasted that inflation in Nigeria will likely remain high in 2025, attributed to sporadic flooding and challenges with the naira currency in navigating difficult terrain. This prediction contrasts with the expected slowdown in inflation across key African economies next year.
The acute shortage of dollars in many African countries, including Angola, Nigeria, and Zambia, has consistently strained domestic inflation due to reliance on single commodity currency inflows, such as crude oil and copper.
Despite earlier projections by the International Monetary Fund of a decrease in Nigeria’s inflation from the current 33.2 percent to 23 percent in 2025, the Reuters poll indicates a more modest decline. Analysts anticipate Nigerian inflation to quicken to 29.1 percent this year before gradually easing to 17.2 percent in 2025. This projection reflects challenges even amidst the Central Bank of Nigeria’s tightening monetary policies.
Food price inflation, which constitutes approximately half of the Consumer Price Index basket, remains a significant factor in Nigeria’s high inflation rate. Factors such as flooding, rising fertilizer costs, and ongoing insecurity in food-producing regions contribute to sustained elevated food prices, with only marginal impact from monetary policy adjustments.
In contrast, Ghana, Angola, and Zambia are expected to experience a slowdown in inflation in the coming years, reflecting diverse sources of dollar revenues and potentially more stable economic conditions.
In Nigeria, given the anticipated rainfall predictions for 2024 and the potential for flash floods, the Nigeria Meteorological Agency has issued crucial advisories for residents in wetlands and low-lying regions to relocate to higher ground to mitigate risks to life and property. The FCT Emergency Management Department has also initiated measures to sensitize residents, barricade roads in flood-prone areas, and strategize for the safety of communities during the upcoming rainy season. Stakeholder engagements and assessments of flash flood areas are planned to ensure preparedness and minimize the impact of flooding in the FCT.
