While unveiling its Pan-African inflation forecasts, the data-driven insights provider made a noteworthy announcement.

According to their projections, Nigeria's annual inflation rate is expected to steadily increase, reaching approximately 30 percent by the end of the year, a level not seen since the country's modern democratic era.

Stears revealed that these forecasts rely on reliable econometric tools that take into account a wide range of factors influencing inflation, encompassing both general and country-specific dynamics.

Fadekemi Abiru, Head of Insights at Stears, stated, "In September, we observed a substantial rise in the exchange rate premium, which represents the difference between official and parallel exchange rates, reaching 25.2 percent, a significant increase from the previous month of August."

“We expect this gap to keep widening and exerting further inflationary pressures unless we see significant dollar inflows into the economy. We have also had heavy and prolonged rainy season, which has affected harvests. Following the recent release of Nigeria’s September 2023 inflation data, the country’s forecasts have been prioritised, with Kenya’s projections scheduled for early November and forecasts for other African nations coming in early 2024.”

The company emphasized that its forecasts are intended to provide guidance for businesses, professionals, and policymakers when making pricing, investment, and policy decisions in the short to medium term. They specified that these inflation forecasts encompass the period from October 2023 to December 2024 and encompass both average and year-end predictions for both 2023 and 2024.

Nigeria currently grapples with one of the highest inflation rates globally, and between January and May 2023, an estimated four million individuals were pushed into poverty due to the deteriorating cost of living.

According to the World Bank, the removal of fuel subsidies, as well as the devaluation and unification of the exchange rate system, are expected to sustain inflationary pressures in the country in the near future, further eroding the purchasing power of the average Nigerian.

In its recent Africa Pulse report, the World Bank noted, “The incoming Tinubu administration implemented a series of reforms that included the removal of fuel subsidies and the devaluation and unification of the exchange rate system.

“Petroleum prices have more than tripled since the subsidies were lifted at the end of May. The naira has weakened by nearly 40 percent against the US dollar since the mid-June devaluation. Although these measures are intended to improve the fiscal and external accounts of the nation, their inflationary effects in the near term can erode the purchasing power of households and weigh on economic activity.”

The World Bank has projected a 25 percent inflation rate for 2023, but the country's current inflation rate is far higher.