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NBS data shows easing price pressures amid Tinubu’s reforms
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Analysts warn food prices still dangerously high for rural Nigerians.
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Investor confidence improving, but risks remain, experts caution.
Nigeria’s inflation rate dropped to 22.97% in May 2025, marking a second consecutive monthly decline, according to new figures released Monday by the National Bureau of Statistics (NBS).
The drop, from 23.71% recorded in April, signals cautious optimism about the country’s economic stability following key fiscal reforms implemented by President Bola Ahmed Tinubu’s administration.
“In May 2025, the headline inflation rate eased to 22.97 per cent relative to the April 2025 headline inflation rate of 23.71 per cent,” the NBS report stated.
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The report attributed the moderation to a combination of rebased inflation calculation methodology, improved supply chains, and ongoing monetary tightening by the Central Bank of Nigeria (CBN).
The CPI was recalibrated in January 2025 to use 2024 as the new base year, replacing the outdated 2009 benchmark.
The rebasing sharply adjusted January’s inflation figure to 24.48%, down from 34.80% recorded in December 2023 using the old formula.
On a month-on-month basis, inflation slowed to 1.53% in May from 1.86% in April.
Despite overall moderation, food inflation remains a critical concern for households nationwide. NBS data shows food inflation at 21.14% year-on-year in May — slightly down from 21.26% in April, but still elevated when compared to pre-reform levels.
Month-on-month food inflation rose to 2.19% from 2.06%, driven largely by increased prices in staples such as yam, cassava, maize flour, sweet potatoes, fresh pepper, and ogbono.
Urban inflation stood at 23.14% year-on-year, while rural inflation dropped to 22.70%. Core inflation — which strips out volatile food and energy items — also declined to 22.28% from 27.04% in May 2024.
The report noted massive inflationary variation between states. Bayelsa recorded the highest monthly rise in headline inflation at 9.11%, followed by Bauchi (4.85%) and Borno (4.42%). In contrast, Kaduna, Jigawa, and Edo posted steep declines of -6.75%, -4.40%, and -2.94%, respectively.
Borno also led year-on-year food inflation at 64.36%, trailed by Bayelsa (39.85%) and Taraba (38.58%). Katsina (6.90%), Rivers (9.18%), and Kwara (11.31%) recorded the slowest annual increases.
On a monthly basis, Bayelsa (12.68%), Cross River (11.15%) and Anambra (9.10%) saw the sharpest food price hikes.
According to the NBS, food and non-alcoholic beverages accounted for the largest contribution to inflation at 9.20 percentage points. This was followed by:Transport: 2.45%, Housing, water, electricity, gas, and other fuels: 1.93%, Education: 1.42%.
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Financial experts said the latest inflation figures may boost foreign portfolio inflows and confidence in Nigeria’s fixed income and equities markets.
“If this trend continues, and the naira holds steady, investors may begin returning more aggressively,” one analyst stated.
However, they warned of significant downside risks, including global commodity volatility, domestic insecurity affecting agricultural output, and Nigeria’s unclear fiscal consolidation trajectory.
At its May meeting, the CBN’s Monetary Policy Committee kept interest rates unchanged for the second consecutive time, after six aggressive hikes in 2023. The bank has signalled its priority is now on policy consistency and managing inflation expectations over the medium term.
