Inflation May Fall To 14% By 2026 If Reforms Persist — Afreximbank

If Nigeria maintains its current trajectory of economic reforms, inflation could decline to around 14 per cent by the end of 2026, the Group Chief Economist and Managing Director of Afreximbank, Yemi Kale, has declared.

Speaking during his keynote address at The Platform Nigeria, Kale observed that although inflation eased to 20.12 per cent in August, down from 21.88 per cent in July, Nigerian households will continue to feel economic strain in the near term.

He attributed earlier inflationary pressures to a history of inconsistent monetary policy, which alternated between tightening to control prices and loosening to stimulate growth. This approach was often undermined by quasi-fiscal interventions that diluted policy effectiveness.

In the more recent period, the Central Bank of Nigeria (CBN) has adopted a sharper focus on price stability, lifting the Monetary Policy Rate (MPR) to 27.5 per cent and utilising open market operations to mop up excess liquidity.

These steps, he said, have contributed to a visible decline in inflation from average levels of 25–30 per cent in 2023–2024 into the low 20s. Food inflation, though still elevated, is also now decelerating.

According to Kale, every one percentage point reduction in inflation helps protect real income and savings, and sends a stronger signal to investors by providing more predictable economic conditions.

He also criticised prior reform efforts for failing to include robust social protection measures to buffer vulnerable populations against the immediate shocks of reform.

To illustrate his point, Kale cited the experiences of Egypt and Ghana, where policy reforms were matched with targeted programs such as cash transfers and school feeding schemes to soften the transition.

Kale emphasised that the success of reforms does not lie only in political resolve, but also in careful planning, clear communication, and well-designed execution.

He argued that social safety nets must accompany structural changes to build sustainable public confidence in the measures.

In concluding, he urged that continuing on the reform path, fortified by social protection and credible policy implementation, is essential if Nigeria is to reduce inflation to manageable levels by 2026.