Nigeria’s inflation trajectory in 2026 could improve significantly if key macroeconomic conditions fall into place, according to insights from market analysts tracking currency movements, food supply dynamics and monetary policy signals.
A leading Investment Associate at AAG Capital, Oyinkansola Aregbeseola, has described a 13 per cent inflation outcome next year as an achievable “bull case” scenario, contingent on sustained foreign exchange stability and a meaningful rebound in domestic food production. She shared this outlook while analysing base, bull and bear naira forecasts during a recent interview on ARISE TV.
According to Aregbeseola, recent volatility in inflation data has been amplified by the 2024 rebasing of the Consumer Price Index (CPI), which has temporarily distorted headline figures. However, she noted that the underlying fundamentals suggest that inflationary pressures could ease sharply if the naira strengthens and supply-side constraints in agriculture are addressed.
She explained that the National Bureau of Statistics (NBS) is currently managing what she described as a “statistical issue” arising from the rebasing exercise. To address concerns around data clarity and market confidence, the bureau has committed to publishing two sets of inflation figures—one reflecting the raw data and another normalised version adjusted for rebasing effects.
“The majority of participants are aware that this is primarily a statistical issue,” Aregbeseola said. “The NBS announced they are going to release two different reports to try and normalise those numbers. I think this is welcome, especially for the sake of transparency.”
Beyond the technical adjustments, AAG Capital’s outlook for 2026 is built around three distinct scenarios. In the base case, inflation is expected to moderate to about 14.6 per cent, assuming the naira remains relatively stable at around ₦1,450 to the dollar, extending the currency stabilisation trend seen through much of 2025.
A more optimistic bull case projects inflation easing further to 13 per cent. This outcome, however, would require a stronger macroeconomic performance, particularly a sharp appreciation of the naira to about ₦1,300 to the dollar. Improved foreign exchange inflows, better market confidence and tighter alignment between fiscal and monetary policy would be critical to achieving this scenario.
On the downside, Aregbeseola warned of a bear case in which inflation could climb back to 16 per cent. This risk scenario is largely driven by potential geopolitical shocks and persistent insecurity, especially in key agricultural regions. Disruptions to farming activities, she noted, would quickly translate into higher food prices, undermining any gains from currency stability.
A recurring theme in the forecast is the strong link between national security and inflation outcomes. Food inflation remains one of the most significant contributors to headline inflation in Nigeria, making improved security in food-producing belts a decisive factor in any sustained disinflation trend.
For the 13 per cent inflation target to materialise, Aregbeseola stressed that recent government efforts to address insecurity must deliver tangible results on the ground. A revival in agricultural output would help stabilise food supply, reduce price pressures and reinforce broader macroeconomic stability.
She cautioned that without improvements on the supply side, especially in agriculture, it would be difficult to maintain downward pressure on prices, regardless of exchange rate gains or fiscal interventions.
Meanwhile, the Central Bank of Nigeria (CBN) is closely watching the evolving inflation data. According to Aregbeseola, monetary policy authorities are currently in a “wait-and-see” posture, with future decisions on interest rates likely to depend on how inflation behaves once the rebasing-related distortions are fully accounted for.
As the NBS continues to provide both raw and normalised inflation figures, the direction of monetary policy will remain closely tied to the clearer picture that emerges from the adjusted data—shaping Nigeria’s inflation outlook as it moves toward 2026.