The Nigerian economy is expected to experience some stability in 2025, as experts forecast a gradual rebound for the naira and a reduction in inflation.
After a challenging 2024 marked by steep price increases and significant currency depreciation, signs of recovery are emerging.
The naira, which lost approximately 41% of its value in 2024, has shown some improvement, appreciating by N125 to the dollar one month after the introduction of the Electronic Foreign Exchange Matching System (EFEMS). Analysts suggest this could signal the beginning of a recovery for the local currency. Inflation, which hit a three-decade high of 34.6% in November 2024, is also projected to ease due to higher interest rates and improved monetary policies.
Afrinvest Research projects the naira at a weighted fair value of N1,804.45 per dollar, with inflation slowing to 24.7% under a base-case scenario. However, they warn that volatility could persist as the Central Bank of Nigeria (CBN) may struggle to meet market demands sustainably.
Cardinalstone Research forecasts that inflation will average 30% in 2025, with year-end inflation settling at around 26.2%. The naira’s fair value is estimated at N1,720.88 per dollar, driven by increased foreign portfolio inflows, higher FX reserves, and the impact of EFEMS.
Veriv Africa predicts inflation will remain high, ranging between 31.81% and 37.16% depending on economic conditions. The naira is expected to stabilize at N1,790 per dollar in the parallel market, with continued inflationary pressures stemming from food insecurity, energy costs, and currency depreciation.
Renowned economist Bismarck Rewane anticipates inflation will decline to 25%-27% by the end of 2025, although prices could still peak at 35.4% in December. He suggests that monetary policy adjustments may slow borrowing costs as inflation eases.
Biodun Adedipe projects the naira will average N1,574.4 per dollar in 2025, with inflation moderating to 27% by year-end. He expects a slower pace of naira depreciation compared to 2024.
Despite persistent challenges such as food insecurity, climate change impacts, and logistics costs, analysts believe that targeted reforms and effective policies could provide a steadier economic path for Nigeria in 2025.
