2025 looks promising as economic analysts forecast a year of recovery and moderation for Nigeria, with the naira stabilizing and inflation showing signs of easing compared to the economic challenges of 2024.
After a clamorous 2024, during which the naira lost about 41% of its value and was ranked among the worst-performing currencies globally, the local currency is showing signs of recovery. Following the introduction of the Electronic Foreign Exchange Matching System (EFEMS), the naira appreciated by ₦125 to the dollar within a month, signaling potential stabilization.
Inflation in Nigeria reached a 30-year high of 34.6% in November 2024, prompting the Central Bank of Nigeria (CBN) to increase the Monetary Policy Rate (MPR) to 27.5%. Analysts now predict a gradual decline in inflation rates in 2025, dependent on several factors.
Afrinvest Research projects that the naira may depreciate to a weighted fair value of ₦1,804.45 while predicting inflation to slow to 24.7% under a base-case scenario. Analysts highlight that constraints in FX supply, due to reliance on reserves sourced from stringent external inflows, may hinder further stability.
Cardinalstone Research anticipates inflation averaging 30% in 2025, with year-end figures improving to 26.2% from the projected 35.1% in 2024. The naira is expected to stabilize at approximately ₦1,720.88 to the dollar, supported by EFEMS, improved FX inflows, and a favorable current account balance.
Veriv Africa predicts that inflation, while remaining high, will be a bit more moderate compared to 2024. The naira is expected to settle at ₦1,790 in the parallel market, with inflation averaging 31.81% under a bull-case scenario and 34.52% under a base-case scenario.
Recurring challenges such as currency depreciation, food insecurity, climate-related disruptions, high energy costs, and elevated logistics expenses are expected to maintain upward pressure on prices. However, improvements in FX reserves, increased foreign investments, and monetary policy adjustments may help out.
Bismarck Rewane, CEO of Financial Derivatives Company, notes that inflation has significantly impacted household incomes and business profits but is likely to ease by the second half of 2025. He projects inflation to decline to 25–27% by year-end, with corresponding reductions in borrowing costs later in the year.
Biodun Adedipe, founder of B. Adedipe Associates Limited, expects the naira to stabilize at ₦1,574.4/$1 in 2025, with inflation moderating to 27% by the end of the year. He emphasizes the importance of consistent monetary policy in achieving these outcomes.
While the Nigerian economy faces persistent challenges, 2025 holds promise for a more stable naira and moderating inflation. The introduction of EFEMS and other fiscal policies are paving the way for economic recovery, with experts advocating vigilance and adaptive strategies to sustain these gains.
