Nigeria’s Inflation Rate Falls to 20.12% in August, Fifth Consecutive Drop

Nigeria’s inflation eased again in August, the fifth month of decline, as headline inflation fell to 20.12% from 21.88% in July 2025.

The National Bureau of Statistics (NBS), which released the figures on Monday, noted that the pace of price increases has been slowing across both food and non-food categories. 

On a month-to-month basis, Nigeria’s inflation stood at 0.74% in August 2025, well below the 1.99% recorded in July, revealing that consumer prices are rising at a much slower rate.

The bureau explained: “This shows that the Headline inflation rate (year-on-year basis) decreased in August 2025 compared to the same month in the preceding year (i.e., August 2024), though with a different base year, November 2009 = 100.”

Urban and Rural Divide

Urban areas saw an inflation rate of 19.75% in August, a sharp drop from 34.58% in the same month of 2024. The monthly change was just 0.49%, down from 1.86% in July. 

Rural inflation came in slightly higher at 20.28%, though still far lower than the 29.95% seen a year earlier. Month-to-month, rural inflation dropped to 1.38%, compared to July’s 2.30%.

Food Prices Ease

Food, which has been the most sensitive pressure point for households, recorded inflation of 21.87% year-on-year in August. That’s a steep decline from 37.52% in August 2024. 

On a monthly basis, food inflation slowed to 1.65%, nearly half of July’s 3.12%. The NBS attributed the drop to falling prices of items such as rice (imported and local), guinea corn flour, maize flour, sorghum, millet, semolina, and soya milk.

Core Inflation

Excluding volatile food and energy prices, core inflation stood at 20.33% in August, lower than 27.58% a year ago. However, on a month-to-month basis, it edged up to 1.43%, compared to 0.97% in July.

Economic Outlook

The Central Bank of Nigeria (CBN) has kept its Monetary Policy Rate at 27.5%, but Governor Olayemi Cardoso hinted that lower interest rates may be possible if inflation continues to ease. 

Speaking at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos, he said high lending rates, currently between 32% and 36%, could face “downward pressure” as conditions stabilise.

Meanwhile, global voices have stressed the need to pair reforms with social protection. The Director-General of the World Trade Organisation, Ngozi Okonjo-Iweala, after meeting President Bola Tinubu in August, said: 

“We think that the President and his team have worked hard to stabilise the economy. You cannot really improve an economy unless it is stable. So, he has to be given the credit for the stability of the economy. The reforms have been in the right direction. 

“What is needed next is growth; we now need to grow the economy and we need to put in social safety nets so that people who are feeling the pinch of the reforms can also have some support to weather the hardship. That’s the next step.”

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