Our Reporter
Nigeria’s headline inflation rate dropped to 18.02 per cent in September 2025, marking its sixth consecutive month of decline and the first time in three years the rate has fallen below the 20 per cent threshold.
The development, disclosed by the National Bureau of Statistics (NBS) in its latest Consumer Price Index (CPI) report released on Wednesday, signals a gradual easing of price pressures and raises expectations of further monetary policy easing by the Central Bank of Nigeria (CBN).
According to the report, the September inflation rate was 2.1 percentage points lower than the 20.12 per cent recorded in August. On a year-on-year basis, inflation dropped sharply from 32.70 per cent in September 2024, representing a significant 14.68 percentage point decline over the past year.
Economists attribute the trend to the rebasing of the CPI, relative currency stability, and moderation in food prices — factors that have supported the first rate cut by the CBN’s Monetary Policy Committee (MPC) in years.
“The sustained dip in inflation reinforces the possibility of further rate cuts by the MPC before the end of the year,” the NBS report noted.
Food Prices Ease, Core Inflation Follows
The NBS said food inflation slowed to 16.87 per cent in September, a steep drop from 37.77 per cent a year earlier. The moderation was linked to a decline in the prices of key staples such as maize, garri, beans, potatoes, onions, tomatoes, and peppers.
On a month-on-month basis, food inflation contracted by 1.57 per cent, compared to 1.65 per cent in August — a rare negative reading driven by improved harvests and seasonal supply flows.
Similarly, core inflation — which excludes volatile food and energy components — fell to 19.53 per cent, down from 27.43 per cent in September 2024.
Regional Variations Persist
At the sub-national level, Adamawa (23.69%), Katsina (23.53%), and Nasarawa (22.29%) recorded the highest year-on-year headline inflation rates, while Anambra (9.28%), Niger (11.79%), and Bauchi (12.36%) posted the lowest.
For food inflation, Ekiti (28.68%), Rivers (24.18%), and Nasarawa (22.74%) were the highest, with Bauchi (2.81%), Niger (8.38%), and Anambra (8.41%) at the bottom of the chart.
Economists Expect Further Rate Cuts
Financial analysts say the sustained disinflation strengthens expectations that the CBN may continue to ease monetary policy to stimulate growth.
Lukman Otunuga, Senior Research Analyst at FXTM, noted that “a combination of softer food prices and a strengthening naira may have tamed price pressures. Further cooling could pave the way for another rate cut in November.”
Analysts at Arthur Steven Asset Management shared similar sentiments, observing that “the sustained disinflation trend following the 50 basis points MPR cut in September suggests another possible rate reduction before year-end.”
In its Inflation Watch, AIICO Capital said the decline reflects the positive impact of government reforms and a stable macroeconomic environment.
“With inflation approaching the 15 per cent budget benchmark, there is room for further rate easing. However, sustaining price stability will require consistent policy discipline, strengthened food security, and continued stability in energy prices,” AIICO noted.
A Turning Point for Nigeria’s Economy
The sustained moderation in inflation marks a potential turning point for Africa’s largest economy, long plagued by volatile food and energy prices. If maintained, the trend could enhance consumer confidence, reduce borrowing costs, and boost investment sentiment across key sectors.
However, analysts warn that the structural drivers of inflation — insecurity, logistics bottlenecks, and energy costs — remain unresolved, and could quickly reverse gains if not addressed.
For now, September’s figures offer a rare window of optimism: after years of stubborn inflation, Nigeria may finally be edging towards a period of sustained price stability and monetary policy flexibility.