Nigeria’s headline inflation is expected to decline further to 16.4 per cent owing to falling prices of foodstuffs and naira appreciation, according to research by United Capital.
The pan-African financial services institution made the forecast in a report it released on Wednesday, November 5.
“Nigeria’s headline inflation rate will drop to 16.30% in October 2025, down from 18.02% in September 2025.
“The anticipated decline is attributed to the falling prices of major food items and appreciation in the value of the Naira against the US Dollar,” United Capital stated.
It, however, noted that the increase in energy prices—particularly premium motor spirit (PMS), known as petrol or fuel, in October, on account of a shortage in supply, exerted upward pressure on consumer prices, especially energy-sensitive goods and services.
Its research shows that the average prices of most food items declined in October 2025 compared with September, except for Garri, which recorded a notable increase.
“This observation is based on United Capital Research’s survey of selected food items during the month, compared with the National Bureau of Statistics (NBS) average food price data for September 2025,” United Capital said.
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It explained that the general decline in food prices was largely driven by the ongoing harvest season, which improved market supply.
“Specifically, the average prices of White Maize fell by 5.07% per kg, Local Rice dropped by 2.86%, Yam declined by 2.73%, Brown Beans by 2.31%, Imported Rice by 0.71%, and Sorghum by 0.37%. However, the average price of Garri increased significantly by 11.58%, reflecting supply constraints in cassava tuber production,” it explained.
The financial services institution noted that the average price of Bonny Light crude oil declined by 5.77 per cent to $66.15 per barrel in October 2025, from $70.20 per barrel in September 2025.
It said, however, that the retail pump price of petrol across the filling stations monitored increased from ₦865 per litre in the first week of October to ₦992 per litre by mid-month.
It attributed the uptick in petrol prices to supply disruptions caused by the industrial action embarked on by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
“By month-end, the average retail price moderated to around ₦922 per litre following improved distribution. The temporary surge in PMS prices exerted upward pressure on inflation-sensitive sectors, particularly transportation, hospitality, and food services,” United Capital stated.
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It pointed out that the Naira appreciated by 2.55 per cent, averaging ₦1,459.54 to the United States dollar in October versus ₦1,497.79/US$1 in September.
“The appreciation in the value of the Naira against the US Dollar had a positive pass-through impact on the local prices of some imported items,” United Capital said.
It stated that the average price of imported rice dropped by 0.71 per cent to N2,379 per kg during the month of October from the position recorded in September 2025.
It forecast further that the stability gains thus far support the case for a rate cut despite external headwinds.
Pinnacle Daily reports that the Central Bank of Nigeria (CBN) had its first rate cut this year in September and is scheduled to hold its final Monetary Policy Committee (MPC) meeting for the year between Monday, November 24, and Tuesday, November 25, 2025.
According to the research, there is a high probability of a rate cut when the committee meets, given the progress made in achieving macroeconomic stability over the past few months.
“While we acknowledge the emerging risks to the economy stemming from certain recent public statements, we expect that appropriate interventions will be undertaken to address and contain the situation,” United Capital added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
