According to the latest Consumer Price Index (CPI) report from the National Bureau of Statistics (NBS), this represents the lowest level since November 2020.

While the headline figure offers a glimmer of macroeconomic stability, a deeper dive into the data reveals emerging pressures in the food sector that could challenge this trajectory in the coming months.

The Paradox: Easing Headline vs. Spiking Food Prices

Despite the overall decline in headline inflation, food inflation rose to 12.12% in February, up from 8.89% in January.

The NBS attributed this surge to a renewed spike in the prices of staples like cassava, yams, beans, and crayfish.

Analysts point to two primary drivers for this monthly pressure:

1. Ramadan Demand: Early bulk-buying by households in preparation for the fasting period has exerted upward pressure on market prices.
2. Agricultural Seasonality: A reduction in farming activities during the current cycle has tightened the supply of key staples.

Energy and Currency: The Stabilizing Forces

The marginal ease in the headline rate was largely supported by a moderating core inflation basket.

Key factors included:

• Fuel Price Moderation: Energy costs saw a slight reprieve after the Dangote Refinery reduced its ex-depot PMS price by ₦25 per litre (to ₦774).
• Naira Appreciation: The Naira gained approximately 4.32% in the official window during February, averaging ₦1,355.34/$, which helped contain the cost of imported goods.

What This Means for the Economy

On a month-on-month basis, headline inflation actually saw an upward movement to 2.01%, reversing the contraction seen in January (-2.88%).

This suggests that while the year-on-year base effect is keeping the headline figure low, real-time price pressures are intensifying.

As the Central Bank of Nigeria (CBN) monitors these figures, the slight interest rate cut implemented earlier this year signals an expectation of continued moderation.

However, with food prices halting their months-long decline, the last mile of disinflation may prove more difficult than anticipated.

The country’s headline inflation rate declined Month-on-Month from 18.02% in September 2025 to 16.05% in October 2025, a 1.97%.

On a Year-on-Year basis, the inflation rate fell to 16.05% in October 2025 from 33.88% recorded in October 2024, revealing a significant reduction compared to the same period last year.  

The Consumer Price Index (CPI), which measures changes in the average prices of goods and services, rose to 128.9 basis points in October 2025, up from 127.7 basis points in September 2025, indicating a 1.2 point increase.

Nigeria’s CPI growth rate, however, decreased from 32.26% in October 2024 to 10.24% in October 2025.

Urban Inflation closed at 15.65% Year-on-Year and 1.14% Month-on-Month, while rural inflation closed at 15.86% Year-on-Year and 0.45% Month-on-Month.

For the Combined rural and urban State CPI on a Year-on-Year basis, Ekiti, Nasarawa and Zamfara recorded the highest increases in all-items inflation rate at 20.14%, 18.97%, and 18.81% respectively. Bauchi, Anambra, and Gombe recorded the lowest increases at 9.99%, 11.72%, and 11.73%.

On a Month-on-Month basis, Niger and Anambra recorded the highest rise in all-items inflation rate at 4.90%, each, followed by Enugu at 4.72%.

Edo, Kastina, and Adamawa recorded the lowest Month-on-Month changes with -4%, -3.26%, and -3.10% respectively.

For Nigeria’s food inflation in October 2025, Ogun, Nasarawa, and Ekiti recorded the highest Year-on-Year increases at 20.85%, 19.96%, and 19.70%. Akwa Ibom, Kastina, and Yobe posted 3.98%, 4.15%, and 4.29%.

Month-on-Month food inflation was highest in Bauchi (6.77%), the FCT (5.11%), and Niger (4.84%), while Kastina (-7.72%), Oyo (-5.89%), and Taraba (-4.89%) recorded the biggest decline. 

“In January 2024, the headline inflation rate increased to 29.90% relative to the December 2023 which was 28.92%,” the NBS said in its Consumer Price Index (CPI) report – which measures changes in prices of goods and services – for January.

Looking at the movement, the January 2024 rate showed an increase of 0.98% points when compared to the December 2023 headline inflation rate.

Similarly, on a year-on-year basis, rate was 8.08% points higher compared to the rate recorded in January 2023, which was 21.82%.”

According to the NBS, the cost of food, on a year-on-year basis, was 35.41%, 11.10% points higher compared to the rate recorded in January 2023 (24.32%).

“The rise in food inflation on a year-on-year basis was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, oil and fat, fish, meat, fruit, coffee, tea, and cocoa,” the NBS report read.

It revealed this in its latest country report for Nigeria, indicating a significant drop and potential forex challenges for Africa’s largest economy.

The country’s external reserves stood at $33.12bn as of February 8.

The IMF anticipated a challenging period through 2024–25 for the country’s financial account, exacerbated by an absence of new Eurobond issuances, significant repayments of existing funds and Eurobonds totaling $3.5 billion, and continued portfolio outflows.

Despite projecting a current account surplus, the reported reserves were expected to diminish to $24bn in 2024, with a hopeful recovery to $38bn by 2028 as portfolio inflows were forecasted to pick up once again.

The report read, “Through 2024–25, the financial account is likely to deteriorate, with no projected issuance of Eurobonds, large Fund and Eurobond repayments of $3.5bn, and portfolio outflows.

“Hence, despite a current account surplus, officially reported reserves are projected to decline to $24bn in 2024 before increasing again to $38 billion in 2028 as portfolio inflows resume.”

The IMF noted that the first half of 2023 witnessed a surplus in the current account, yet there was a notable decline in reserves.

The downturn has been attributed to a decrease in crude oil exports, largely due to oil theft and a lack of investment in essential upstream infrastructure.

The IMF report added that profit repatriation from the oil sector had dipped, albeit slightly offsetting the adverse effects on the current account.

Amid those dynamics, Foreign Direct Investment in the country has remained low, while there has been an uptick in portfolio outflows, including equity and Eurobond repayments as well as repatriations.

The report added, “The CBN reported a 30-day average of gross international reserves declined to $33bn in October (almost $4bn below end-2022), covering six months of imports and 83 per cent of the IMF’s ARA metric.

“Following the IMF’s definition of GIR, $8bn in securities are considered pledged collateral that are thus not readily available, reducing GIR under the IMF’s definition to $25bn at end-October 2023.

“The authorities have not shared full information on short-term FX liabilities which would be necessary to calculate net international reserves. Through 2024–25, the financial account is likely to deteriorate, with no projected issuance of Eurobonds, large Fund and Eurobond repayments of $3.5 billion, and portfolio outflows.”

The IMF also claimed that the Nigerian authorities had yet to disclose comprehensive information on short-term foreign exchange liabilities, which are crucial for calculating the net international reserves accurately.

The fund recently said stalled per-capita growth, poverty and high food insecurity had exacerbated the ongoing cost-of-living crisis in Nigeria.

According to the IMF, low revenue collection has hampered the provision of services and public investment.

It noted that headline inflation reached 27 per cent year-on-year in October (food inflation 32 per cent), reflecting the effects of fuel subsidy removal, exchange rate depreciation, and poor agricultural production in the country.

This means a 1.82% month-on-month hike, according to the (CPI) report for July 2022 released by the National Bureau of Statistics (NBS) on Monday.

“On a month-on-month basis, the Headline inflation rate in July 2022 was 1.817 %, which was 0.001% higher than the rate recorded in June 2022 (1.816 %),” the NBS added.

“The percentage change in the average CPI for the twelve months period ending July 2022 over the average of the CPI for the previous twelve months period was 16.75%, showing a 0.46% increase compared to 16.30% recorded in July 2021.”

According to the NBS report, the country’s urban inflation increased by 2.08% to 20.09% in July 2022 from 18.01% in July 2021. On the other hand, the rural inflation rate reached 19.22% from 16.75% in the corresponding period of 2021.

“On a month-on-month basis, the food inflation rate in July was 2.04%, this was a 0.01% insignificant decline compared to the rate recorded in June 2022 (2.05%),” the agency equally noted in its latest report.

“This decline is attributed to a reduction in the prices of some food items like Tubers, Maize, Garri, and Vegetables.

“The average annual rate of food inflation for the twelve-month period ending July 2022 over the previous twelve-month average was 18.75%, which was a 1.42% points decline from the average annual rate of change recorded in July 2021 (20.16%).”

On inflation rates across states in the country, the report added: “In July 2022, all items’ inflation rate on a year-on-year basis was highest in Akwa Ibom (22.88%), Ebonyi (22.51%), Kogi (22.08%), while Jigawa (16.62%), Kaduna (17.04%) and Borno (18.04%) recorded the slowest rise in headline Year-on-Year inflation.

“However, on a month-on-month basis, July 2022 recorded the highest increases in Adamawa (2.87%), Abuja (2.84%), Oyo (2.77%), while Bauchi (0.82%), Kano (0.83%) and Niger (1.03%) recorded the slowest rise on month-on-month inflation.”

[Source: Channels]