Nigerian businesses are preparing for rising inflation, with 50.6% anticipating higher prices in January 2025, according to a Central Bank of Nigeria (CBN) survey. Many companies struggled with rising costs last year, impacting their profitability.
Diverging Inflation Expectations
While businesses foresee increased inflation, 44.2% of households believe prices will remain stable. The survey, which gathered insights from 1,900 firms and 1,665 households, highlighted that businesses expect higher expenses this month compared to households.
However, in the next six months, both groups anticipate lower spending, suggesting concerns over economic conditions.
Key Inflation Drivers
Respondents identified energy costs, exchange rates, transportation fees, and interest rates as major factors shaping their inflation outlook.
Nigeria’s inflation rate hit 34.8% in December 2024, driven primarily by rising food and transport costs, according to the National Bureau of Statistics (NBS).
Inflation’s Impact on Businesses and Households
Soaring inflation is eroding purchasing power, leaving businesses with higher inventory losses and households with diminishing savings. Many respondents in the CBN survey see inflation as alarmingly high, with households expressing greater concern than businesses.
Larger companies, in particular, perceive prices as significantly high, while smaller businesses report a lower inflation perception.
Urban and Income-Based Inflation Perception
City dwellers view inflation as more severe than those in rural areas. Additionally, households earning N150,001–N200,000 monthly are most affected, reporting a stronger perception of rising costs.
As inflation fears persist, businesses and households will need to adapt spending habits, while policymakers work to stabilize the economy.
