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Nigeria witnessed a second consecutive month of declining inflation in February 2025, with the rate falling to 23.18% from January’s 24.48%. This downward trend, a 1.30 percentage point decrease, offered a glimmer of hope against the backdrop of persistently high living costs. While the overall inflation rate moderated, concerns lingered among economists and the public regarding the affordability of essential goods. Adding complexity to the national picture, three states, Edo, Enugu, and Sokoto, recorded inflation rates exceeding 30%, highlighting regional disparities in price pressures. These states grappled with elevated food prices, increased transportation costs, and supply chain disruptions, factors that intensified the inflationary burden on their residents. Sokoto experienced the most dramatic month-on-month increase at 11.98%, followed by Kogi and Edo, indicating a continued rapid rise in prices within these specific regions.
The February 2025 inflation rate marked a significant 8.52 percentage point decrease compared to February 2024’s rate of 31.70%. This substantial year-on-year decline offered a comparative perspective on the progress made in curbing inflation. While the month-on-month inflation rate of 2.04% still indicated rising prices, the pace of increase had demonstrably slowed, suggesting a potential shift in the inflationary trajectory. The National Bureau of Statistics (NBS) attributed part of the decline to a change in the base year used for inflation calculations. However, they emphasized that even accounting for the methodological shift, the figures represented a tangible slowdown in price increases.
Food prices remained a dominant force in shaping the overall inflation landscape. Food inflation in February 2025 stood at 23.51%, a stark decrease from the 37.92% recorded in February 2024. The NBS highlighted price reductions in key staples like yams, potatoes, soybeans, maize flour, cassava, and dried bambara beans as contributing factors to the easing of food inflationary pressures. This month-on-month food inflation rate of 1.67% further reinforced the trend of decelerating price increases. Despite these positive developments, food inflation continued to exert the largest influence on the overall inflation rate, accounting for 9.28% of the headline index, underscoring the ongoing vulnerability of households to food price fluctuations.
Experts and industry stakeholders offered nuanced perspectives on the latest inflation figures. The Centre for Promotion of Private Enterprise (CPPE) acknowledged the decline but emphasized that the 23.18% rate remained significantly high, indicating that prices were still rising, albeit at a slower pace. The CPPE attributed the deceleration to the base effect and a stabilizing macroeconomic environment, predicting a continuation of this trend throughout 2025. Economists pointed to the drop in energy and food costs as primary drivers of the reduced inflation rate, highlighting the influence of lower fuel prices on the cost of goods and services. The stabilization of fuel prices, facilitated by the Dangote Refinery, played a key role in mitigating cost-induced inflation.
Furthermore, the reduction in the prices of staple foods, including beans, tomatoes, yams, onions, and rice, contributed to the overall decline in inflation. Experts emphasized the impact of seasonality on inflation trends, noting that demand typically decreases after the holiday season, leading to a moderation in price increases. The rebasing of the Consumer Price Index (CPI) also introduced a methodological adjustment to the inflation calculations. Stakeholders welcomed the easing of inflation as a positive sign for both consumers and businesses, with hopes that the trend would continue and extend its benefits to other sectors, including interest rates, power, real estate, and the broader food market.
The decrease in inflation offered a welcome respite from the persistent price pressures that have strained household budgets and hampered business operations. While the overall trend pointed towards moderation, the situation remained complex, with regional disparities and the continuing dominance of food inflation underscoring the need for sustained efforts to address the underlying drivers of price volatility. The insights from experts and industry stakeholders highlighted the multifaceted nature of the inflationary dynamics, emphasizing the interplay of factors such as fuel prices, food costs, macroeconomic stability, and methodological adjustments in shaping the overall trajectory of inflation. Despite the recent progress, the focus remained on achieving sustained price stability and ensuring that the benefits of lower inflation translate into tangible improvements in the living standards of ordinary Nigerians.
