Nigeria’s headline inflation rate continued its downward trend for the fifth consecutive month, easing to 20.12 per cent in August 2025 from 21.88 per cent recorded in July.
This represents a 1.76 percentage point decline, according to the Consumer Price Index (CPI) report released on Monday by the National Bureau of Statistics (NBS).
The sustained moderation follows April 2025, when inflation peaked at 23.71 per cent, sparking concerns over cost-of-living pressures.
The latest figures suggest that price growth in Africa’s largest economy is beginning to cool after a period of steep increases driven by exchange rate volatility, high energy costs, and global food price shocks.
On a month-on-month basis, headline inflation stood at 0.74 per cent in August, indicating a slower pace of increase in average prices compared to July’s 1.35 per cent. “This means that in August 2025, the rate of increase in the average price level was lower than in July,” the NBS explained.
The twelve-month average CPI also declined, with a growth rate of 24.66 per cent in August 2025 compared to 31.26 per cent in August 2024 — showing clear signs of easing pressure across a longer-term horizon.
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The NBS data revealed a noticeable gap between urban and rural inflation. Urban inflation dropped to 19.75 per cent in August 2025, far below the 34.58 per cent recorded in the same period last year. On a monthly basis, urban inflation slowed sharply to 0.49 per cent, compared to 1.86 per cent in July.
Rural inflation also eased, standing at 20.28 per cent year-on-year in August 2025, compared with 29.95 per cent in August 2024. On a monthly basis, it fell to 1.38 per cent from 2.30 per cent in July.
Food inflation, the most critical indicator for Nigerian households, recorded a significant decline to 21.87 per cent in August 2025, compared with 37.52 per cent in August 2024. NBS attributed part of this sharp drop to the change in base year calculations.
Month-on-month, food inflation slowed to 1.65 per cent from 3.12 per cent in July, largely due to falling prices of staples such as imported and local rice, guinea corn, millet, maize flour, semolina, and soya milk.
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The average annual food inflation rate for the twelve months ending August 2025 was 25.75 per cent, compared with 36.99 per cent in August 2024.
For millions of families, this signals some relief after months of escalating food costs. Food inflation has been the single largest contributor to Nigeria’s overall price instability, given that food accounts for more than 50 per cent of household spending.
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Core inflation, which excludes volatile items such as food and energy, stood at 20.33 per cent in August 2025, down from 27.58 per cent in August 2024. However, on a month-to-month basis, core inflation ticked upward to 1.43 per cent, from 0.97 per cent in July — suggesting that underlying price pressures remain.
The twelve-month average core inflation rate eased to 23.04 per cent compared with 25.18 per cent in August 2024.
The Central Bank of Nigeria (CBN) is closely monitoring these trends as it seeks to balance price stability with economic growth.
Governor Olayemi Cardoso recently suggested that continued moderation in inflation could pave the way for a decline in interest rates. Speaking at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos, Cardoso noted that commercial lending rates currently between 32 and 36 per cent may come under downward pressure as macroeconomic conditions stabilise.
At its 301st Monetary Policy Committee (MPC) meeting in July, the CBN voted unanimously to maintain the Monetary Policy Rate (MPR) at 27.5 per cent, citing the need to consolidate gains in inflation management while avoiding premature policy loosening.
What This Means
The easing of inflation is a positive sign for Nigeria’s economy, particularly for businesses and households that have struggled with soaring costs over the past two years.
However, the moderation is fragile, with risks from exchange rate volatility, global energy prices, and domestic insecurity in food-producing regions still looming.
If the trend holds, Nigeria could be on track for a more stable macroeconomic environment heading into 2026, with potential spillover benefits for investment, consumer confidence, and job creation.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
