The Independent Media and Policy Initiative (IMPI) has projected that Nigeria’s headline inflation will fall to 17 per cent by the end of 2025, following months of steady declines that brought the figure down to 20.12 per cent in August.

The Abuja-based policy think tank also urged the Central Bank of Nigeria (CBN) to ease its benchmark interest rate, noting that the economy is already in what it described as a “disinflationary phase.”

In its latest policy statement signed by Chairman Dr. Omoniyi Akinsiju, IMPI argued that contrary to critics who dismiss the impact of falling inflation, Nigeria is experiencing a rare and sustained slowdown in consumer prices.

“Empirically speaking, the Nigerian economy is now in a disinflationary dispensation,” the group stated. “Inflation fell from 24.5 per cent in January to 20.12 per cent in August, a 17.5 per cent drop — the sharpest mid-year slowdown in over a decade.”

The group attributed the decline to three factors: the CBN’s tight monetary stance with the policy rate at 27.5 per cent, improved foreign exchange inflows that stabilized the naira, and better food harvests aided by relative calm in farming regions.

IMPI projected that inflation could fall further to 17 per cent by December, closer to the federal government’s 15 per cent target. It expects the CBN’s Monetary Policy Committee (MPC) to respond by cutting the MPR by at least 50 basis points at its next meeting and up to 200 basis points before year-end. It also forecast a review of the cash reserve ratio from 50 per cent to 35 per cent to boost liquidity and lower borrowing costs.

The think tank further noted that macroeconomic stability was already improving the performance of major Nigerian companies, particularly in the consumer goods sector, which had suffered steep foreign exchange losses after the naira was floated in 2023.

According to IMPI, seven leading firms — including Nestlé Nigeria, Nigerian Breweries, BUA Foods, and Dangote Sugar — collectively lost N418 billion in Q1 2024 due to naira depreciation and rising interest costs. But by Q1 2025, they rebounded with combined pre-tax profits of nearly N290 billion, posting another N264 billion profit in Q2.

“These sharp earnings reversals highlight how currency stability and internal cost controls can quickly shift the fortunes of companies previously dragged down by macroeconomic headwinds,” IMPI said.

With inflation cooling, exchange rates stabilizing, and corporate profits rebounding, the group concluded that Nigeria’s economy is entering a phase of greater resilience and recovery.