Nigeria's annual average inflation is projected to decline to 15.6 per cent in 2026 before easing further to 14.7 per cent in 2027, according to the International Monetary Fund. This represents a marked slowdown from the 23.0 per cent average inflation recorded in 2025, reflecting progress after a period of elevated price pressures driven by macroeconomic imbalances, foreign exchange volatility and external supply chain disruptions.
The improvement is expected to be driven by key stabilisation measures now taking effect. The IMF identified increased exchange rate stability and growing domestic refining capacity as central to moderating persistent domestic price pressures across supply chains. Coronation Research analysts supported these findings, noting that higher domestic refining capacity has aimed to reduce energy import dependency and temper transportation fuel costs. The IMF also projects Nigeria's gross domestic product to grow by 4.2 per cent in 2026 and 4.3 per cent in 2027, supported by continued foreign exchange reforms and strong performance in the non-oil sector.
However, significant risks could slow the pace of disinflation relief for businesses and consumers. Coronation Research warned that higher energy and fertiliser costs, alongside election-related spending, may constrain the speed of price moderation. Lingering supply risks, higher agricultural input costs and fiscal pressures continue to pose potential risks to the broader disinflation trend. High input expenses and local food insecurity also present direct risks to overall household welfare, potentially constraining how effectively macro disinflation translates into immediate improvements in daily living standards.
Following a period of aggressive policy interventions including foreign exchange market adjustments and structural economic reforms aimed at stimulating non-oil production, the focus has shifted toward restoring price stability and stabilising the local currency. Coronation Asset Management's internal estimate for 2027 annual average inflation sits at 14.56 per cent, closely aligned with the IMF forecast. According to Coronation analysts, while structural headwinds remain, ongoing economic policy reforms and expanded refining operations provide a foundation for steady, long-term price moderation.
For savers, borrowers, business owners and investors, the projected decline in inflation means the purchasing power of money should gradually improve, though food costs and energy prices may continue to pose challenges to household spending and business profitability in the near term.