Nigeria inflation hits 18.02% in September, lowest in three years

Thursday 16th October 2025

by inAfrika Newsroom

Nigeria inflation eased to 18.02% in September, the lowest reading in more than three years, as food prices cooled and harvests improved supply, the National Bureau of Statistics (NBS) said. The rate fell from 20.12% in August and continued a six-month disinflation streak that began in April.

Food inflation, the biggest driver of household costs, slowed to 16.87% year-on-year in September from 21.87% in August, according to the NBS release. The agency said food and non-alcoholic beverages remained the largest contributors to the headline rate, followed by restaurants, accommodation and transport.

The latest print marks a sharp retreat from the 32.7% pace recorded in September 2024, before Nigeria recalibrated its inflation metrics, and from the December 2024 peak near 35%, analysts noted. Local media also flagged easing month-on-month core inflation and a continued slowdown in the 12-month average inflation rate.

The Central Bank of Nigeria (CBN) has responded to the trend by cutting interest rates for the first time since 2020, seeking to steer inflation toward single digits over time, Reuters reported. The bank has said future moves will remain data-dependent.

Markets and consumers will watch whether the decline proves durable. Inflation accelerated through 2023 after the government scrapped a long-standing fuel subsidy and moved to unify exchange rates, reforms that officials argued were needed to stabilize public finances and improve foreign-exchange liquidity. Those steps initially drove up living costs, eroding purchasing power and pressuring businesses.

Nigerians have since faced a squeeze from higher transport fares, costlier imported inputs and elevated food prices, particularly in urban centers. The September data suggest some relief as harvests reach markets and distribution improves. But the NBS noted that price pressures persist in categories tied to services and logistics.

Analysts said the sixth straight monthly drop in Nigeria inflation creates space for cautious monetary easing if the trajectory holds. Vanguard reported that while the rate is improving, it remains above the CBN’s long-run target and far from single-digit territory. That leaves policymakers balancing price stability with the need to support a weak consumer economy.

Households continue to adjust to the removal of energy subsidies, while firms contend with higher financing costs and imported inflation from a still-fragile naira. Economists say further moderation will require steady food supplies, better transport links and credible foreign-exchange management to anchor expectations. They add that any fresh shocks—poor harvests, conflict in food-producing regions, or a sharp currency slide—could stall gains.

The headline figure also matters for regional investors. A Johannesburg survey published Thursday said global trade disruptions and tighter funding have jolted African financial systems over the past year, even as some countries push reforms to FX regimes and climate resilience. Nigeria’s disinflation, if sustained, could help lower domestic borrowing costs and nudge bond yields, traders said.

For now, the story is one of tentative improvement. Nigeria inflation is falling, led by food. The coming months will test whether supply gains can outpace structural constraints and whether monetary policy can consolidate a path back toward price stability.