The Central Bank of Nigeria (CBN) has projected that the country’s inflation rate will moderate to 12.94 per cent in 2026, driven largely by declining prices of fuel and food items.
The projection was contained in the apex bank’s macroeconomic outlook for 2026, released on Wednesday. According to the report, Nigeria’s economy is also expected to record stronger growth, with gross domestic product (GDP) forecast to expand by 4.49 per cent in the year ahead.
The CBN attributed the anticipated economic growth to continued gains from broad-based structural reforms and a gradual easing of monetary policy conditions. It noted that ongoing reforms across key sectors of the economy were expected to boost productivity, improve investor confidence and support overall macroeconomic stability.
“Headline inflation is projected to moderate to an estimated average of 12.94 per cent in 2026, driven by declining food and premium motor spirit (PMS) prices,” the apex bank stated.
The outlook follows recent developments in Nigeria’s downstream oil sector, where fuel prices have recorded noticeable declines in recent weeks. The reductions have been linked to an intense price war among petroleum marketers, sparked largely by aggressive pricing strategies from the Dangote Refinery.
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In a bid to gain market share, the refinery significantly cut its gantry price for petrol, forcing other marketers to adjust their prices downward. As a result, pump prices of petrol have reportedly been hovering between N739 and N910 per litre across different parts of the country, offering some relief to consumers who had grappled with high energy costs.
Lower fuel prices are expected to have a knock-on effect on transportation and production costs, which could help ease pressure on food prices and overall inflation. Supporting this trend, the National Bureau of Statistics (NBS) reported that Nigeria’s food inflation dropped to 11.08 per cent in November 2025, signalling an early moderation in price pressures within the food segment.
The CBN’s inflation forecast suggests a significant improvement compared to recent years, when Nigeria battled persistently high inflation driven by currency depreciation, supply chain disruptions and rising energy costs. Analysts say that if sustained, lower inflation would improve purchasing power and support consumer spending.
However, they caution that the outlook remains dependent on factors such as global oil prices, domestic security conditions, exchange rate stability and the consistency of policy implementation. While the projections offer cautious optimism, economists stress that maintaining the downward trajectory of inflation will require disciplined fiscal management and continued reforms across the economy.
