Amid Nigeria’s ongoing wave of economic reforms under President Bola Ahmed Tinubu’s administration, new data from the National Bureau of Statistics (NBS) indicates that the country’s inflation rate has begun a tentative descent, offering a glimmer of relief to consumers and policymakers alike.
According to the Consumer Price Index (CPI) and Inflation Report for June 2025, Nigeria’s headline inflation eased to 22.22%, a notable decline of 0.76 percentage points from the 22.97% recorded in May 2025. The development marks the second consecutive monthly decline and the lowest inflation rate the country has recorded since early 2024.
“This decline reflects the impact of monetary tightening and structural adjustments underway in the economy,” said a senior NBS statistician during the report briefing in Abuja. “While the numbers are still high, the trend offers cautious optimism.”
What is Driving the Numbers?
Despite the yearly decline, month-on-month inflation rose slightly to 1.68% in June, up from 1.53% in May, indicating that prices are still increasing – albeit at a slower annual pace. The primary contributors to headline inflation include:
- Food and non-alcoholic beverages (8.89%)
- Restaurants and accommodation services (2.87%)
- Transport (2.37%)
Food inflation, which has historically driven headline rates, eased significantly on a year-on-year basis to 21.97% which was 18.90 percent points lower – a sharp fall from 40.87% in June 2024. This dramatic decline is largely attributed to a recent rebasing of the CPI, which now better reflects current consumption patterns and economic structures.
“The significant decline in the annual food inflation figure is technically due to the change in the base year.”
However, on a month-on-month basis, food prices rose by 3.25%, up from 2.19% in May 2025. Items driving this increase include green peas, fresh pepper, crayfish, tomatoes, and plantain flour – indicating continued price volatility in perishable goods.
Regional Breakdown
Disaggregated state data highlights stark regional disparities. Borno State recorded the highest year-on-year inflation at 31.63%, followed by Abuja (26.79%) and Benue (25.91%). At the other end of the spectrum, Zamfara (9.90%), Yobe (13.51%), and Sokoto (15.78%) recorded the slowest annual inflation.
In terms of food inflation, Borno again topped the chart at a staggering 47.40%, followed by Ebonyi (30.62%) and Bayelsa (28.64%) – a reminder that while national averages are falling, some states continue to face crippling cost-of-living pressures.
Month-on-month food inflation was highest in Enugu (11.90%), Kwara (9.97%), and Rivers (9.88%), suggesting food insecurity remains a serious concern in some southern and central states.
The Core Picture
Stripping out volatile farm produce and energy prices, core inflation stood at 22.76% year-on-year in June. This figure is especially relevant to policymakers as it reflects deeper structural price movements unaffected by seasonal food shocks.
The core inflation rate rose by 2.46% month-on-month, up sharply from 1.10% in May – indicating persistent inflationary pressures in housing, education, health, and transport.
Meanwhile, new sub-indices introduced after the CPI rebasing revealed intriguing trends:
- Farm produce prices dropped by 13.3%,
- Energy costs fell by 11.0%,
- Service prices jumped by 3.26% – showing the uneven effect of reforms across economic sectors.
Inflation and the Reform Context
The easing inflation rate comes on the back of tight monetary policy pursued by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso. Key policies include raising the Monetary Policy Rate to 26.75%, halting Ways and Means deficit financing, and unifying exchange rates to reduce FX market distortions.
“We are seeing the early fruits of disciplined policy choices. The numbers show that inflation, though still high, is beginning to respond to macroeconomic tools,” said an analyst at a Lagos-based financial advisory firm.
CPI Rebasing
The June 2025 report also marks the first major inflation reading since the NBS rebased the CPI basket. The agency updated its methodology, shifting the base year from 2009 to 2024, with 2023 as the reference for household spending weights.
Statistician-General of the Federation, Prince Adeyemi Adeniran, noted that the rebasing aligns the inflation metric with the current economic structure. It now includes emerging sectors and accounts for evolving consumption patterns.
“This update allows for more accurate and timely macroeconomic planning. It also provides a better basis for international comparison,” Prince Adeniran stated during the press release.
While June’s inflation figures offer a positive signal, significant risks remain – particularly in food security, energy pricing, and regional disparities. Structural constraints in logistics, power supply, and FX liquidity continue to exert pressure on household budgets.
Nonetheless, the downward trend in inflation is a welcome development for a government eager to demonstrate reform dividends. As the CBN tightens further and fiscal consolidation continues, analysts will be watching closely to see if Nigeria can sustain this trajectory into the second half of 2025.
