For the first time in three years, Nigeria’s headline inflation has slipped below the 20 per cent mark, a moment many economists see as both a symbolic and structural turning point. According to the National Bureau of Statistics (NBS) Consumer Price Index (CPI) Report for September 2025, headline inflation eased to 18.02 per cent year-on-year, down from 20.12 per cent in August. The figure marks the sixth consecutive monthly decline, offering the first tangible relief to households grappling with the long aftermath of fuel subsidy removal, currency volatility, and import cost pressures.
The September CPI rose modestly to 127.7 points, compared with 126.8 in August, confirming that prices are still rising, albeit at a slower pace. On a month-on-month basis, inflation stood at 0.72 per cent, slightly below 0.74 per cent in August, signalling a mild cooling in consumer prices.
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The data also shows a remarkable 14.68 percentage-point decline in annual inflation compared to 32.70 per cent recorded in September 2024, following the recalibration of the CPI base period to 2024. This change, while technical, reflects the genuine deceleration in price momentum nationwide.
At the divisional level, Food and Non-Alcoholic Beverages accounted for the largest share of inflationary pressure, contributing 7.21 per cent, followed by Restaurants and Accommodation Services (2.33 per cent), Transport (1.92 per cent), and Housing, Water, Electricity, Gas and Other Fuels (1.52 per cent).
Perhaps the clearest signal of recovery came from the food basket, which has long been Nigeria’s most stubborn driver of inflation. The food inflation rate fell sharply to 16.87 per cent year-on-year, down from a staggering 37.77 per cent in the same month last year. Month-on-month, food inflation registered a -1.57 per cent change, a drop of 3.22 points from August’s 1.65 per cent increase.
The NBS attributes this moderation to declines in the prices of key staples, maize, garri, beans, millet, potatoes, onions, eggs, tomatoes and fresh pepper, aided by improved harvests, better market access, and stabilised logistics. In urban markets such as Lagos, Abuja, and Port Harcourt, traders report that wholesale prices of grains and vegetables have begun to “find their level” after two years of volatility.
Still, analysts warn the relief may be seasonal. Adverse weather or transport disruptions could easily reverse these gains, especially as rural supply lines remain fragile.
Policy Easing and the Rate Debate
The Central Bank of Nigeria (CBN), having recently trimmed its benchmark repo rate to 6.50 per cent, finds itself at a delicate juncture. This was its first policy easing since 2022, a move aimed at stimulating domestic demand and supporting small businesses struggling under tight credit. The new inflation figures may embolden policymakers to pursue further cuts, but only if they can trust that disinflation is sustainable.
Nigeria’s monetary policy committee remains cautious, wary that premature loosening could reignite inflationary pressures. The core inflation rate, which excludes food and energy, remains relatively high at 19.53 per cent, reflecting ongoing cost pressures in housing, education, healthcare, and manufactured goods.
The bank’s next move will likely hinge on whether subsequent months confirm a genuine downward trajectory or a temporary reprieve.
What It Means for Daily Life
While the macro picture paints optimism, the human story is more subdued. Households may notice small declines in the prices of food and transport, but essential services such as rent, tuition, and utilities remain stubbornly high.
Across Nigeria’s 36 states, the inflation story is far from uniform. The NBS report shows that Adamawa (23.69 per cent), Katsina (23.53 per cent), and Nasarawa (22.29 per cent) recorded the highest year-on-year headline inflation, while Anambra (9.28 per cent), Niger (11.79 per cent), and Bauchi (12.36 per cent) experienced the lowest.
Urban inflation stood at 17.50 per cent, while rural inflation was 18.26 per cent, suggesting that rural households, often more dependent on subsistence farming and local markets, are still shouldering a heavier burden.
Threats That Could Rekindle the Fire
Despite the encouraging numbers, several risk factors continue to threaten Nigeria’s fragile disinflation. Fuel and energy volatility remains a key concern, as global oil price swings and exchange-rate fragility could push domestic pump prices higher. Exchange-rate pressures linger; the naira’s relative stability since mid-2025 is delicate, and any sharp depreciation could reignite imported inflation.
Supply chain weaknesses persist, particularly in transport and agricultural logistics, where insecurity and poor infrastructure often delay goods. Fiscal measures designed to improve non-oil revenue through higher taxes or tariff reforms could also stoke price pressures.
Nigeria’s structural cost drivers notably energy dependence, logistics inefficiency, and governance bottlenecks, remain potent risks to price stability.
Nigeria’s inflation slowdown is not an isolated melody. Across emerging markets, 2025 has been a year of gradual disinflation. South Africa’s inflation stands near 4.8 per cent, Kenya’s 4.5 per cent, and Ghana’s 9.4 per cent, each country reflecting varying success in curbing price growth.
Globally, the OECD forecasts G20 inflation to average 3.4 per cent in 2025, easing to 2.9 per cent in 2026, while the International Monetary Fund (IMF) notes that inflation across advanced and emerging economies is “retreating from its post-pandemic high.” Nigeria’s new trajectory while higher than global averages, now moves in the same direction.
This alignment strengthens confidence among international investors who view stability as a precondition for re-entry into Nigeria’s bond and equity markets.
The path ahead requires more than favourable statistics. Disinflation must now be translated into sustainable price stability, underpinned by improved food systems, fiscal prudence, and credible communication from policymakers.
The projected twelve-month average inflation of 23.46 per cent for the period ending September 2025 underscores that the scars of high inflation still linger. Yet, this figure is 8.27 points lower than last year’s 31.73 per cent, a measurable stride toward normalcy.
If Nigeria can maintain this trend while supporting growth and employment, it may finally begin to turn inflation from a national anxiety into a managed variable.
The Last Word
Nigeria’s fall below 20 per cent inflation is more than a technical achievement; it is a sign that coordinated fiscal and monetary management can bear fruit even in turbulent conditions. The months ahead will test whether this improvement can be sustained without compromising growth.
For now, the data tells a story of guarded optimism, a moment when the heat finally eased, and the world’s most populous black nation took a careful step toward macroeconomic stability.
