Nigeria’s consumer price index showed further signs of relief as the headline inflation rate dropped to 18.02% in September, down from 20.12% in August, according to data released by the National Bureau of Statistics (NBS) today. This marks the sixth straight month of easing prices, and it’s the first time in three years that the rate has dipped below the 20% mark.
The latest Consumer Price Index (CPI) report highlights a broader slowdown in price growth across the economy. Economists attribute much of this progress to the recent rebasing of the CPI to a 2024 base year, which has recalibrated the measurement of consumer baskets and contributed to the decline. This development has already prompted the Central Bank of Nigeria’s Monetary Policy Committee (MPC) to implement its first interest rate cut in years, reducing the benchmark rate by 50 basis points to 27% last month. Analysts now anticipate additional cuts at the upcoming November meeting to bolster economic activity.
Breaking down the figures, the year-on-year headline inflation fell by 14.68 percentage points from 32.70% in September 2024. Month-over-month, the rate stood at 0.72%, a slight improvement from August’s 0.74%, signaling a marginally slower pace of price increases.
Food prices, a major driver of inflation in Nigeria, also moderated significantly. Annual food inflation eased to 16.87%, a 20.9-point drop from 37.77% a year earlier—again, largely due to the base effect from CPI rebasing. On a monthly basis, food prices actually declined by 1.57%, a sharp reversal from August’s 1.65% rise. The NBS pointed to falling prices for staples like maize, garri, beans, millet, potatoes, onions, eggs, tomatoes, and peppers as key factors.
Core inflation, excluding volatile farm produce and energy costs, came in at 19.53% year-on-year, down 7.9 points from September 2024’s 27.43%. Monthly core inflation ticked down to 1.42% from 1.43%. Over the trailing 12 months, average annual inflation stood at 22.39%, 3.25 points lower than the prior year’s figure.
Disparities persisted between urban and rural areas. Urban inflation rose slightly month-on-month to 0.74% from 0.49%, but remained 17.63 points lower year-on-year at 17.50%. In rural regions, rates fell both annually (to 18.26%) and monthly (to 0.67%).
At the state level, inflation pressures varied widely. Adamawa recorded the highest year-on-year rate at 23.69%, followed by Katsina (23.53%) and Nasarawa (22.29%). In contrast, Anambra (9.28%), Niger (11.79%), and Bauchi (12.36%) saw the smallest increases. Monthly spikes were most pronounced in Zamfara (9.36%), Adamawa (8.15%), and Nasarawa (7.49%), while Niger (-8.14%), Oyo (-5.56%), and Bayelsa (-4.61%) posted declines.
For food specifically, Ekiti topped the year-on-year list at 28.68%, with Rivers (24.18%) and Nasarawa (22.74%) close behind. Bauchi (2.81%), Niger (8.38%), and Anambra (8.41%) had the mildest rises. Monthly food inflation peaked in Zamfara (15.62%), Ekiti (12.77%), and Sokoto (12.55%), but plunged in Akwa Ibom (-12.97%), Borno (-12.95%), and Cross River (-10.36%).
Market observers had anticipated this trend. Lukman Otunuga, Senior Research Analyst at FXTM, forecasted a rate around 18.8%, citing stabilizing food costs and a firmer naira as dampeners on price pressures. He suggested that continued cooling could encourage the Central Bank to pursue more rate reductions in November to spur growth.
Echoing this, experts at Arthur Steven Asset Management noted the sustained disinflation since the September rate cut, reinforcing bets on another trim at the next MPC session. Meanwhile, AIICO Capital’s Inflation Watch report credited government reforms, including the CPI update, for the progress. They highlighted the naira’s 2.9% appreciation in September—its strongest in 15 months—and stable energy prices as supportive factors. With inflation nearing the 15% budget target, further easing seems plausible, though experts stressed the need for ongoing efforts in food security, policy consistency, and energy stability to prevent rebounds.
This positive shift comes amid broader economic challenges, including a naira that weakened to N1,473.29/$ for the third straight day and debates over schools charging fees in foreign currencies. As Nigeria navigates these dynamics, the inflation data offers a glimmer of optimism for households and businesses alike.
