Nigeria’s Inflation May Hit Single Digit for First Time in Over Five Years

Nigeria’s inflation rate could fall into single digit territory for the first time in more than five years, according to economist Ayo Teriba, raising cautious optimism about easing cost pressures across the economy.

Teriba believes inflation is on a clear downward trajectory and could continue moderating into early 2026. If realised, this would mark a major turning point after several years of persistently high inflation that eroded household incomes, increased rent burdens, and drove up construction and living costs nationwide.

Inflation surged sharply in recent years, driven by a combination of exchange rate adjustments, higher energy prices, food supply challenges, and structural inefficiencies across the economy. While prices remain elevated, recent trends suggest a slowdown in the pace of increases rather than continued acceleration.

What Is Driving the Inflation Slowdown

According to Teriba’s assessment, the moderation in inflation is linked to seasonal price adjustments, easing consumer demand pressures, and a gradual stabilisation of key economic variables. Retail price competition, especially during peak spending periods, has also helped slow price growth into the new year.

In addition, tighter monetary conditions and reduced liquidity growth have contributed to cooling inflation momentum. While these measures have placed pressure on borrowing and investment, they have also helped anchor price expectations.

Implications for Housing and Real Estate

A sustained move toward single digit inflation could have meaningful implications for Nigeria’s housing market. Lower inflation typically improves household purchasing power and helps stabilise rent increases. For developers, slower price growth could bring greater predictability to construction costs, materials pricing, and project planning.

Mortgage affordability could also improve if easing inflation eventually creates room for lower interest rates. This would be particularly important for middle income households that have been priced out of home ownership in recent years.

However, industry analysts caution that inflation alone will not solve Nigeria’s housing challenges. Supply constraints, infrastructure gaps, land administration issues, and weak access to long term finance remain critical barriers to affordability.

Risks and Outlook

Despite the optimism, risks remain. Food price volatility, exchange rate fluctuations, and global commodity shocks could still reverse recent gains. Inflation may slow without translating into immediate relief for households if incomes do not rise alongside price stability.

For Nigeria’s housing market, the key question is whether lower inflation can be sustained long enough to support real income growth and renewed investment. If achieved, single digit inflation would represent not just a statistical milestone, but a potential reset point for affordability and economic confidence.