Rewane sees inflation cooling to 15.3%, GDP slowing to 3.96% in Q3

Nigeria’s inflation is expected to further slow to 15.3 percent in November, marking the eighth consecutive decline as the economy is poised to contract to 3.96 percent in the third quarter, according to Bismarck Rewane, CEO of Financial Derivatives Company.

Rewane said inflation, which is now cooling across African markets, will remain in double digits in several economies, including Egypt, Sudan, Ethiopia, Nigeria, Angola, Malawi, and Zimbabwe, with Africa’s most populous nation’s average 2026 inflation numbers expected to reach 14.9 percent.

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“Inflation is expected to reverse upward in December as the base year gains fade,” the economist said in a presentation at the 18th Alpha Morgan economic review on Wednesday. “For Nigeria and Egypt, a shift by central banks towards more orthodox monetary policy frameworks will support disinflation in 2026.”

Nigeria’s inflation has continued to slow with its October reading at 16 percent serving as the biggest single-month drop since rebasing at the beginning of the year.

Africa’s biggest oil producer remains at an advantage, as positive interest rate differentials are likely to spur capital inflows compared to its peers, according to Rewane, noting that currency devaluations have enabled central banks to build up foreign-reserve buffers, offering a layer of protection against emerging-market shocks.

“The markets most exposed to outflows are Egypt, South Africa, Nigeria and Zambia. Currencies in these markets appear heavily undervalued in relation to fundamentals,” Rewane said.

The naira which experienced steep volatility in the past two years has appreciated by 12 percent year to date at the parallel market, trading between N1,465/$. But Rewane noted that the currency remains undervalued by 21.12 percent in the official market and by 61.93 percent based on EIU global comparisons.

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Rewane however highlights five policy expectations for 2026, including, implementation of tax reform bills, Qaeda was sector forbearance, reduction in capital gains tax, bank recapitalisation and institutional reforms.