Headline Inflation Falls Below 20% for First Time in Years

By Deborah Oladapo

Nigeria’s headline inflation eased to 18.02 percent in September 2025 — its lowest level in more than three years — following a notable moderation in food prices, according to the National Bureau of Statistics (NBS).

The decline marks the sixth consecutive month of disinflation, down from 20.12 percent recorded in August. The NBS attributed the slowdown primarily to improved food supply conditions, seasonal harvests, and reduced transportation costs across major markets.

Food inflation, which remains the biggest component of household expenditure, fell sharply from 21.87 percent in August to 16.87 percent in September, easing cost pressures on consumers after months of volatility.

According to the NBS, food and non-alcoholic beverages, accommodation and restaurant services, and transport were the top contributors to overall inflation.

The latest figures come as Nigerians continue to adjust to the ripple effects of sweeping economic reforms introduced by President Bola Tinubu’s administration — including the removal of fuel subsidies and the unification of the foreign-exchange market — both of which initially triggered sharp price increases.

In response to the improving price outlook, the Central Bank of Nigeria (CBN) last month cut its benchmark Monetary Policy Rate for the first time since 2020. Governor Olayemi Cardoso said the bank’s goal is to achieve single-digit inflation over the medium term while sustaining growth.

Economists say the continued slowdown could provide the CBN with limited room for further rate cuts later this year, though risks remain from weak consumer demand, fiscal pressures, and exchange-rate instability.

While the easing inflation offers modest relief to households and businesses, analysts caution that sustained progress will depend on stable food supply chains, effective policy coordination, and macroeconomic discipline.