Nigerians broke after ‘Detty December’ but inflation will rise, says Rewane’s FDC

After the festive spending of ‘Detty December’, many Nigerians are now feeling the weight of financial strain, says Financial Derivatives Company led by economic expert Bismarck Rewane.

“While most reports highlight that Nigerians are “broke”, inflation is still expected to remain high,” the FDC said in its report ahead of the release of official inflation data next Wednesday. “Our Lagos retail market surveys and regression analysis indicate that inflation will climb to 35.30% from 34.60% in November.”

The economic research firm expects the core inflation (inflation less seasonalities) to rise to 29.25% from 28.75%, reflecting “the persistence of underlying price pressures across key sectors, including housing, healthcare, and transportation”.

It said: “Strangely, our food inflation is forecasted to rise to 40.12% from 39.93%, even as global food prices decline by 2.1% in 2024, according to the Food and Agriculture Organization. This divergence highlights the localized nature of Nigeria’s inflation crisis, driven by factors such as supply chain inefficiencies, insecurity in food-producing regions, and currency volatility. Further corroborating this trend, the Economist Intelligence Unit has projected that global commodity prices drop by 4% in 2025. However, these global dynamics will unlikely shield Nigerian consumers from escalating food costs

“Interestingly, early signs of high customer resistance are beginning to emerge as consumers grapple with income constraints. Retailers report slower demand for goods and services, underscoring the growing disconnect between rising prices and stagnant incomes. This indicates that external factors (e.g., cost-push inflation) are driving the price increase, rather than strong consumer demand.”