March Inflation Expected to Hold at 23.18% Amid Balancing Forces in Food, FX, and Fuel Markets

Analysts are projecting that Nigeria’s headline inflation for March 2025 will likely stay relatively flat around 23.18%, matching February’s figure. This outlook is shaped by a combination of opposing forces—moderating factors like stable food prices, rebasing effects, and a relatively calm FX and fuel environment, contrasted by cost pressures from late-month fuel price hikes and naira depreciation. These factors, according to experts, have effectively balanced each other out for now.

Experts like Samuel Oyekanmi of Norrenberger and Olatunde Amolegbe of Arthur Steven Asset Management both agree that March’s inflation likely hovered due to a strong base effect and easing prices of staples. Amolegbe even suggested that this stability, if sustained, might prompt the Central Bank to start contemplating interest rate cuts—a move that could mark a shift in monetary strategy. The consensus points toward a near-term cooling of inflation, albeit modestly.

However, the calm might be short-lived. The end of March brought a spike in the landing cost of imported petrol—jumping from N797 to N885 per litre—which could reflect in pump prices by April. Alongside this, a sharp depreciation of the naira in early April, falling to N1,600/$1, adds fresh pressure. The FX slump was further exacerbated by new tariffs from the Trump administration on Nigerian exports, increasing the likelihood of rising costs across imported goods and energy.

Looking ahead, all eyes are on April’s numbers. If the trend of fuel and FX instability continues, we may see inflation tick back up, undoing some of March’s short-term gains. For now, March offered a brief reprieve, but analysts are cautious, recognizing the fragile nature of these stabilizing factors. We’ll get the full picture once official inflation data drops, and that will likely set the tone for monetary and fiscal responses moving forward.

Source: Naira metrics