Analysts stay cut up on the trajectory of headline inflation, reflecting ongoing macroeconomic uncertainties because the Nationwide Bureau of Statistics (NBS) prepares to launch the Client Value Index (CPI) for April 2025.
Some analysts are optimistic, anticipating a decline in inflation as a result of statistical base results from April 2024, which was a peak interval for inflation.
In distinction, others warn that persistent structural challenges, notably rising power prices and a depreciating naira, may maintain inflationary pressures.
Nairametrics had beforehand highlighted that if power costs continued to rise and the naira remained below strain, there could possibly be an uptick in inflation in April.
Whereas each components noticed slight will increase through the month, they didn’t escalate considerably sufficient to offset the statistical base-year impact. This means that inflation could not rise as sharply as some initially feared, with the bottom impact doubtless taking part in a extra dominant function in moderating the year-on-year figures.
As consultants anticipate the NBS to launch its knowledge, the combined expectations underscore the complexity of Nigeria’s inflation dynamics.
What consultants are saying
Head of Analysis at Afrinvest West Africa, Damilare Asimiyu, in a phone dialog, projected that headline inflation will ease to 23.6% year-on-year in April, a slight retreat from 24.23% recorded in March. In keeping with him, the moderation is primarily pushed by a beneficial excessive base-year impact.
“April 2024 marked a big inflationary peak. On a year-on-year foundation, this can create a downward bias even when costs proceed to development upward on a month-to-month foundation,” Asimiyu famous.
Nevertheless, this optimism is tempered by different analysts who see room for additional inflationary strain.
Head of Funding Administration at Norrenberger Asset Administration, Victor Onyema, expects a slight uptick in inflation, forecasting that the headline fee may rise above March’s 24.23%. “We have now seen persistent will increase in power and web service prices, each main elements of core inflation,” Onyema famous. “These elevated utility and communication bills are eroding family buying energy and pushing core inflation greater. Moreover, meals costs haven’t seen any significant decline through the interval below evaluate, providing no significant reduction.”
She added, “An absence of a downward development in meals inflation limits any potential reduction on the headline quantity.”
Managing Director of Arthur Steven Asset Administration, Olatunde Amolegbe, added a broader macroeconomic lens, pointing to exterior shocks as further inflationary drivers. He famous that the risky worldwide setting, together with a stoop in oil costs and a weakened naira, continues to exert strain on home inflation.
“The influence of world macroeconomic shifts just like the tariff-induced commerce slowdown has weakened the change fee, with its resultant influence on the costs of products in Nigeria. Mixed with the latest spike within the stage of insecurities affecting meals provide chains, this can replicate within the April numbers,” he said. Amolegbe expects core inflation to extend by not less than 50 foundation factors in April.
Key drivers of inflation for the month of April 2025
The excessive inflation stage recorded in April 2024 may mechanically suppress the year-on-year determine for April 2025, offering a statistical reprieve even amid elevated costs.
- Rising value of power and web companies
Power and web service prices have continued to climb, pushing core inflation past the March print of 24.4% year-on-year in March, with indicators of continued momentum.
Insecurity in key agricultural zones continues to disrupt provide chains, sustaining meals inflation at elevated ranges. Expectations of seasonal meals worth reduction have to date did not materialize.
- Trade fee depreciation
The naira depreciated by 0.31% in April, transferring from N1,537/$ to N1,602/$, with an intra-month low of N1,644/$. This forex weak point has amplified imported inflation, notably in manufacturing and transport-related segments.
Waiting for Could 2025
- FX Outlook: If the naira stays below strain, imported inflation could stay sticky, undermining any statistical reduction from base results.
- Meals Provide Dynamics: A sustained improve in native meals manufacturing may provide some respite, however insecurity within the north and the Center Belt continues to pose a big threat to distribution and farm gate output.
- Financial Coverage Path: Expectation on the Central Bank of Nigeria’s Financial Coverage Committee (MPC) assembly scheduled within the coming week. A possible hike within the Financial Coverage Price (MPR) may sign a tighter stance geared toward anchoring inflation expectations forward of the mid-year cycle.
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