Nigeria’s inflation could fall to 13 per cent in 2026, provided key economic factors, including foreign exchange stability and increased domestic food production, align effectively.
Oyinkansola Aregbeseola, an Investment Associate at AAG Capital, stated this on Thursday during an interview on ARISE TV, discussing the Base, Bull, and Bear Naira Forecast.
She explained that while the 2024 rebasing of the Consumer Price Index (CPI) has created short-term volatility in data, a stronger Naira projected at ₦1,300 per dollar and improved security in agricultural belts could stabilize prices and significantly reduce headline inflation by year-end.
Addressing concerns over December’s inflation figures, Aregbeseola noted that the National Bureau of Statistics (NBS) is addressing a “statistical issue” caused by the CPI rebasing. The NBS plans to release two reports: the raw figures showing the spike and a normalised version for comparison, ensuring transparency.
“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.
Aregbeseola outlined three inflation scenarios for 2026:
Base Case: Inflation settles at 14.6%, assuming the Naira remains steady at ₦1,450/$, continuing the stabilisation trend of 2025.
Bull Case: A best-case scenario targeting 13% inflation, achievable if the Naira appreciates to ₦1,300/$ and agricultural output improves.
Bear Case: A risk scenario where rising geopolitical tensions and persistent insecurity disrupt farming, potentially pushing inflation to 16%.
She highlighted the critical link between national security and food prices, noting that boosting agricultural production is essential for sustained disinflation.
“For the optimistic 13% target to be met, recent efforts to curb insecurity must produce tangible results, allowing agricultural activity to rebound,” Aregbeseola said. “Without this supply-side stability, downward pressure on prices will be difficult to maintain, regardless of other fiscal interventions.”
As the Central Bank of Nigeria (CBN) monitors inflation, Aregbeseola explained that monetary policy decisions, including interest rate adjustments, will depend on the “normalised” inflation data being released by the NBS.
She added that the CBN is currently in a “wait-and-see” mode, with future policy moves tied directly to the trajectory of inflation after technical adjustments for the 2024 rebasing.
Elijah Adeyemi
