UK leads Nigeria’s capital inflows in Q3 2025, says NBS

By Victor Idajili

The experts at Coronation Research echoed similar sentiments about the headline inflation inching upward, saying, “Ahead of the January inflation release, we expect a modest uptick in headline inflation to 19.19 per cent from 15.15 per cent in December, marking a temporary pause in the recent disinflationary trend. The increase should be largely core-driven, reflecting post-festive demand rebound and pass-through from the January Premium Motor Spirit price adjustment, particularly on transport and energy-related components. While food inflation is likely to remain relatively contained, recent naira appreciation may help reduce imported price pressures. Nonetheless, the broader disinflation trajectory remains intact, but near-term risks are tilted slightly to the upside.”

Coronation Research added that the projected uptick in headline inflation is largely driven by core CPI dynamics. Core inflation is expected to edge higher, driven by post-festive demand spillovers and persistent cost pressures across services, transport, and energy components.

On the February outlook, the investment research firm stated, “For February, we expect the month-on-month uptick in headline inflation to persist, driven by increased consumer demand as traders restock ahead of the Ramadan period, alongside lingering pass-through effects from elevated PMS prices, which continue to exert upward pressure on transport and core inflation components. In line with our baseline inflation outlook, we expect the Central Bank of Nigeria’s Monetary Policy Committee to maintain the policy rate at its 23–24 February meeting. Retaining a restrictive stance should help anchor inflation expectations and sustain portfolio inflows, particularly as global financial conditions gradually ease.”

From AIICO Capital, the January inflation rate is expected to rise to over 18 per cent. According to its weekly report, the market watchers said, “We believe the sharp increase will be largely driven by the base-year effect from both the core (i.e., non-food item prices) and food inflation. Our position is based on the base year effect on the components of the headline inflation, Core and Food Inflation, despite improvement in the exchange rate and stable energy and food prices. Our analysis indicates that core inflation, which reflects changes in the average price of non-farm produce, is expected to ease by a minimum of 10 bps to 0.71 per cent – 0.6 per cent m/m and increase by a minimum of 180 bps to 20.0 per cent – 32.60 per cent y/y.

“The month-on-month easing is expected to be driven by two major factors: naira appreciation and a stable petrol price in January 2025. Notably, the naira appreciated by 343bps (N49.20 per $) to N1,386.55 per $ at the official window and by 102bps (N15.00 per $) to N1,460 per $ in the parallel market. In addition, average petrol prices remained stable at N739 per litre in January before they were adjusted upward to N839 per litre in the late part of the month.

“Similarly, the food inflation price index, which reflects changes in the average price of farm produce, is expected to increase to a range of 0.02-0.8 per cent m/m and by a minimum of 500 bps to a range of 14.0 per cent – 15.90 per cent y/y in January 2026, compared to -0.36 per cent m/m and 10.84 per cent y/y in December 2025. This acceleration would be driven by the base year effect, despite price stability during the month of January.

“Overall, we expect the base year effect to push the inflation rate to a range of 0.4 per cent–0.7 per cent m/m and 18.5 per cent–19.5 per cent y/y.”