Nigeria’s inflation rate drops to 23.18% in February 2025 amid economic adjustments

Nigeria’s inflation rate declined to 23.18% in February 2025, marking a notable drop from 24.1% in January 2025, according to the latest Consumer Price Index (CPI) and Inflation Report released by the National Bureau of Statistics (NBS).

This downward trend comes shortly after the NBS implemented its first overhaul of the consumer price index in 16 years, changing the reference year to 2024 to provide a more accurate reflection of the inflation pressures faced by Nigerian households.

The NBS report highlighted that the Headline Inflation Rate decreased by 1.30 percentage points between January and February 2025. On a year-on-year basis, inflation fell by 8.52 percentage points compared to 31.70% in February 2024.

Urban Inflation: Stood at 25.15% in February 2025, an 8.51 percentage point decline from 33.66% in February 2024. On a month-on-month basis, urban inflation was 2.40% in February 2025.

Rural Inflation: Recorded at 19.89%, reflecting a 10.09 percentage point drop from 29.99% in February 2024. On a month-on-month basis, rural inflation was 1.16%.

Food Inflation: Dropped to 23.51% year-on-year, a 14.41 percentage point decrease from 37.92% in February 2024. Month-on-month, food inflation stood at 1.67%, indicating a slight reduction in the average food prices compared to January 2025.

The NBS also noted that food prices in Abuja and its surrounding areas had started to decline, signaling some relief for consumers.

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While the decline in inflation appears to be a positive development, economic analysts caution that it may not immediately translate into lower prices. Instead, the slower rate of price increases suggests that while inflationary pressures persist, they are not accelerating as rapidly as before.

Dr. Bode Adebayo, an economist at Lagos Business School, explains: “This inflation decline is largely statistical due to the recent adjustment in the NBS inflation calculation methodology. It is not necessarily a sign of immediate economic relief for Nigerians.”

Financial analyst, Kemi Ogunyemi, emphasizes that the impact on consumers will be gradual rather than immediate: “A lower inflation rate doesn’t mean prices are falling. It simply means prices are rising at a slower pace. Households may not feel relief instantly, but if this trend continues, it could lead to economic stabilization.”

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On the policy front, CBN monetary analyst, Dr. Usman Garba, believes that tight monetary policies by the Central Bank of Nigeria (CBN) may have contributed to the inflation slowdown:

“The CBN’s interventions, such as higher interest rates and restrictions on excess liquidity, have played a role in curbing inflation. However, for a sustained reduction, we need structural economic improvements, particularly in agriculture and energy supply.”

Despite the inflation decline, economic challenges remain. Rising energy costs, exchange rate volatility, and insecurity in food-producing regions continue to put pressure on prices.

Analysts suggest that government policies aimed at boosting food production, stabilizing the naira, and improving infrastructure will be key to achieving long-term price stability.

For now, Nigerian consumers can take cautious optimism from the inflation slowdown, even as the broader economic landscape remains challenging.