IMPI forecasts 17% inflation slowdown by year-end

Nigeria’s economic outlook has received a major boost following a fresh projection by the Independent Media and Policy Initiative (IMPI), which forecast that inflation could drop by as much as 17 percent before the end of the year. This comes on the heels of recent positive trends in the country’s inflation data and the impact of sustained monetary and fiscal reforms by the government.

For months, Nigerians have been grappling with soaring food and energy prices that have eroded purchasing power and strained household incomes. Inflation, which has remained stubbornly high due to supply chain disruptions, currency fluctuations, and rising import costs, has been the single largest challenge confronting policymakers. However, IMPI believes that the tide is turning, pointing to several macroeconomic signals that suggest the worst may be over.

The group said its analysis shows that government interventions, especially through the Central Bank of Nigeria (CBN), are beginning to bear fruit. In recent months, the apex bank has pursued a strict monetary tightening policy, raising benchmark interest rates to curb excess liquidity in the system. At the same time, reforms in the foreign exchange market have led to increased stability in the naira, while higher FX inflows from both oil exports and foreign investors have bolstered Nigeria’s external reserves. IMPI argues that these measures have created the right environment for inflation to ease.

A key driver of the projection, according to the think tank, is the improvement in food supply. The government has rolled out several agricultural initiatives aimed at boosting local production and reducing dependence on imports. Coupled with the relative easing of insecurity in some food-producing regions, IMPI predicts that food inflation—which has been the largest component of Nigeria’s inflation basket—will moderate significantly in the coming months.

The group also highlighted the role of the Dangote Refinery, which recently began operations and has already started supplying petroleum products locally and internationally. With Nigeria gradually cutting down on its dependence on imported refined products, IMPI said the refinery is poised to cushion energy-driven inflation, reduce pressure on foreign reserves, and stabilize fuel prices. The refinery’s early impact has been seen in the government’s reduced spending on subsidies and import costs, creating a ripple effect on broader inflation trends.

On the fiscal side, IMPI praised the government’s renewed commitment to cutting waste and implementing policies that encourage investment in local industries. Recent moves to suspend certain controversial levies, alongside initiatives aimed at encouraging the manufacturing and industrial sectors, were described as important steps in improving supply-side factors that contribute to inflation.

Economists, however, have urged caution. While acknowledging the positive trajectory, they note that Nigeria remains vulnerable to external shocks such as fluctuations in global oil prices, international supply chain disruptions, and geopolitical tensions that could affect trade. They also stressed that insecurity, particularly in rural areas, remains a major challenge that could undermine food production and stall progress in controlling inflation.

Nonetheless, IMPI’s forecast has been welcomed by many Nigerians as a sign of hope after a prolonged period of economic strain. If achieved, the projected 17 percent decline in inflation would not only improve household welfare but also increase business confidence and attract more foreign investment into the economy. For small and medium-sized enterprises, a reduction in inflationary pressures could translate into lower operating costs, improved access to credit, and higher profitability.

The potential impact on ordinary citizens is significant. Lower inflation means that basic goods such as rice, bread, cooking oil, and fuel would become more affordable, easing the burden on families who have been forced to cut back on essential spending. It would also provide some relief for workers whose wages have been unable to keep pace with rising prices.

IMPI further emphasized that achieving this target requires consistency in policy execution. The think tank called on the government to avoid policy reversals and ensure that gains in the foreign exchange market are sustained. It also recommended targeted interventions to support farmers, improve logistics infrastructure, and strengthen the distribution networks for essential goods.

In the financial markets, analysts have already noted improved investor confidence, with equities gaining momentum and bond yields reflecting expectations of lower inflation in the near term. The projection, if realized, could further stimulate capital inflows, strengthen the naira, and reduce pressure on Nigeria’s external borrowing needs.

As Nigeria continues its economic reforms, the IMPI forecast represents both a vote of confidence in ongoing policies and a challenge for policymakers to remain steadfast. The possibility of inflation easing by 17 percent before the year ends offers a glimpse of stability for an economy that has weathered multiple storms in recent years. For many citizens, businesses, and investors, it marks the prospect of a new chapter where growth is not stifled by runaway inflation but supported by sound economic management and structural transformation.

At a time when global economies are also dealing with inflationary pressures, Nigeria’s potential turnaround, as projected by IMPI, positions the country as a case study of how consistent reforms and strategic investments can shift an economy from crisis toward stability. Whether this momentum can be sustained will depend on how well the government manages risks and consolidates its gains in the months ahead.