Nigeria’s Inflation Trends: 2024 through mid-2025

Upward trend, ease.

In 2024, inflation in Nigeria reached eye-watering levels. According to the Global Economy database, the annual inflation rate for 2024 was about 33.2 %. This marked a sharp acceleration compared to previous years (e.g. 24.7 % in 2023)

However, from late 2024 into 2025, inflation began to moderate. By February 2025, the headline inflation rate had eased to 23.18 % (year-on-year) after a significant methodological overhaul by the National Bureau of Statistics (NBS) in January that rebased the Consumer Price Index from 2009 to 2024. The drop was steep: December 2024 had seen inflation peaking near 34.8 %, and in January 2025 it dropped to ~24.48 % following the rebasing.

By May 2025, inflation further eased to 22.97 %, driven partly by slower food and core price increases. Core inflation (which excludes volatile food and energy) stood at 22.28 % in that month, down from 27.04 % a year earlier. Over the 12 months ending May 2025, the average CPI increase was about 27.55 %, slightly lower than the 29.06 % recorded for the same period a year earlier. In August 2025, the headline inflation rate came in at 20.12 %, representing the slowest rate since July 2022. Food inflation in that month was ~21.87 %, and the core inflation rate also declined to ~20.3 %.  Month-on-month, the CPI rose by 0.70 % in August, much lower than in previous months.

Thus, over the “past 12 months” (roughly mid-2024 to mid-2025), inflation in Nigeria has transitioned from very high values (in the 30-plus percent range) toward a more moderated, though still elevated, level of ~20–25 %.

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Drivers & Dynamics

1. Base Year Rebasing and Statistical Adjustments
   The NBS rebased the CPI in January 2025 (from 2009 to 2024), which altered the weighting and representation of goods and services in the inflation basket. This change caused a sharp drop in the reported inflation rate from ~34.8 % in December 2024 to ~24.5 % in January 2025 (Reuters).
2. Food Price Pressures
   Food constitutes a large share of Nigeria’s consumption basket. In early 2024, food inflation was a key driver pushing headline inflation upward. By May 2025, food inflation had cooled somewhat to ~21.14 % year-on-year, down significantly from ~40.66 % a year earlier. But fluctuations in agricultural output, supply chain disruptions, transport costs, and security challenges (e.g. in farming regions) continue to exert upward pressure.
3. Exchange Rate Volatility & Import Costs
   Nigeria has had persistent challenges with foreign exchange. Devaluation of the naira and import dependence (especially for fuel, machinery, and some food items) have translated into cost-push inflation pressures. These pressures are compounded by external inflation and global commodity price shocks.
4. Removal of Subsidies and Fiscal Adjustments
   The government’s decision to remove or reduce subsidies (notably on fuel) has had knock-on impacts across the economy — raising fuel and transportation costs, which feed into the price of goods and services.
5. Monetary Policy Tightening
   to counter inflation, the Central Bank of Nigeria (CBN) implemented a series of rate hikes in 2024, culminating in a monetary tightening stance. In 2025, with inflation showing signs of moderation, the CBN held its key interest rate steady (e.g. at 27.5 %) during early meetings. Later, in September 2025, the central bank cut its lending rate by 50 basis points (to 27 %), marking the first cut since 2020, citing expectations of further inflation decline.

Impacts & Challenges

• Cost of Living & Poverty: High inflation has squeezed household purchasing power, especially for lower-income Nigerians who spend a large proportion of income on food and energy. Price hikes in staples like rice, maize, and fuel have forced many families to reduce consumption or substitute to cheaper alternatives.
• Wage-Price Dynamics: Wage increases often lag behind inflation, leading to real wage erosion. Some labor unions have demanded higher wages amid inflationary pressures, which in turn can feed into wage-price spirals.
• Business & Investment Uncertainty: Elevated inflation raises input costs for businesses, erodes profit margins, and can deter investment. It also complicates planning and capital allocation in a volatile environment.
• Monetary & Fiscal Policy Trade-offs: The CBN faces a delicate balancing act: tightening policy too much may stifle growth, while easing too early risks inflation resurgence. On the fiscal side, the government must manage deficits without exacerbating inflation through excessive borrowing.

Outlook & Considerations

While inflation remains high even in mid-2025, the downward trend suggests that Nigeria might be entering a phase of gradual disinflation. Analysts expect inflation to trend toward ~17 % by 2026 and ~15 % by 2027 under favorable conditions (tradingeconomics.com). However, achieving that will depend on:

• Maintaining monetary discipline while supporting growth
• Stabilizing the exchange rate and reigning in external pressures
• Ensuring agricultural productivity and improving supply chain resilience
• Managing fiscal consolidation without triggering crowding out or inflationary impulses

Over the past 12 months Nigeria has seen inflation ease from the extreme highs of late 2024, but at ~20–25 % it remains a major economic burden. The road ahead involves navigating structural bottlenecks and external vulnerabilities while restoring macro stability and protecting living standards.

In a nutshell

Month / Year	Headline Inflation (YoY)	Notes / context
Jan 2025	24.48 %	First reading after CPI rebasing (base 2024)
Feb 2025	23.18 %	Eased somewhat as inflation cooled after rebasing
Mar 2025	24.23 %	Slight uptick from February; monthly inflation also rose ~3.90 % (m/m)
Apr 2025	23.71 %	Continued moderate downward pressure, but still elevated
May 2025	22.97 %	Further decline; food inflation dropped sharply to ~21.14 % YoY
Jun 2025	22.22 %	Eased from May; ongoing cooling trend
Jul 2025	21.88 %	Fourth consecutive monthly decline
Aug 2025	20.12 %	The lowest reading in this period so far