Nigeria’s inflation to fall to 14.3% on reforms with World Bank projects

According to the World Bank, if Nigeria continues its ongoing macroeconomic changes, which have raised prices and exacerbated poverty, the country's inflation rate should fall to 14.3 percent by 2027.


According to the Washington-based lender's latest Nigeria Development Update report, headline inflation is expected to peak in 2024 at an average annual rate of 31.7 percent, primarily due to rising fuel prices and the naira's depreciation.

According to the World Bank, "new macroeconomic reforms and their continuation will help reduce inflation in the medium term, which is expected to fall to 14.3 percent by 2027."

The Bank acknowledges that even while the budgetary changes are unpleasant, they are necessary to prevent the country from collapsing and are already starting to show results.


The inflation rate in Nigeria After hitting a 28-year high of 34.2 percent in June 2024, it started to slow down in July and dropped to 32.15 percent in August, giving households and businesses who have seen their gains eroded and their purchasing power diminished hope for some reprieve.


However, the jump has resumed, as September data showed a 32.7 percent increase, driven by a new nationwide increase in gasoline prices of around 50 percent.


Many analysts predict that this action will further drive up prices and increase the burden on regular Nigerians who are already struggling due to the pump price.

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Six governors are willing to pay more than N70,000 minimum wage.

Nigerians are now grappling with rising energy costs, soaring food prices and transportation fare and a depleting consumer spending.

But the World Bank said "a series of macroeconomic policy missteps in 2015-
2023 contributed to an inflation surge in Nigeria".

According to the report, headline inflation was broadly stable up until 2014, in high single digits or low two digits, not so distant from the levels observed in other major emerging markets.

However, it said that the money supply started to increase in 2015 when the CBN refocused its main priorities from price stability, which was its fundamental duty. By 2023, the confidence in the naira had already been undermined, which led to an increase in inflation.

Even before the set of reforms that started in mid-2023, the paper said, "as a result, inflation was surging, reaching 22.4 percent yoy in May 2023."

According to their prediction, Nigeria's inflation will start to decrease, falling to 23.5 percent by 2025, 18.1 percent by 2026, and subsequently 14.3 percent by 2027.


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