Nigeria’s headline inflation rate continued its downward trend, falling to 20.12% in August 2025 from 21.88% in July, according to the National Bureau of Statistics, signaling a slowdown in price increases amid ongoing economic reforms.

The National Bureau of Statistics (NBS) reports that that the year-on-year inflation rate for August 2025 was significantly lower than the 31.26% recorded in August 2024, reflecting a 6.6% decrease in the 12-month average Consumer Price Index (CPI) to 24.66%.

On a month-on-month basis, the headline inflation rate eased to 0.74% in August, down from higher rates in prior months, indicating a slower pace of price hikes compared to July’s 1.86%.

Urban inflation stood at 19.75% year-on-year, a sharp 14.83% drop from 34.58% in August 2024, with a month-on-month rate of 0.49%. Rural inflation was slightly higher at 20.28% year-on-year, down 9.67% from 29.95% the previous year, with a month-on-month rate of 1.38%. The 12-month averages for urban and rural areas were 25.81% and 23.07%, respectively, both notably lower than 2024 figures.

Food inflation, a key driver of overall prices, fell to 21.87% in August 2025 from 37.52% a year earlier, a 15.65% decline attributed partly to a change in the CPI base year to November 2009. Month-on-month, food inflation dropped to 1.65% from 3.12% in July, driven by lower prices for staples like imported and local rice, guinea corn flour, maize flour, millet, semolina, and soya milk. The 12-month average food inflation rate was 25.75%, down 11.24% from 36.99% in August 2024.

Core inflation, excluding volatile agricultural and energy prices, was 20.33% year-on-year, a 7.25% decrease from 27.58% in August 2024, though it rose slightly month-on-month to 1.43% from 0.97%. The 12-month core inflation average was 23.04%, down 2.14% from the prior year.

Central Bank of Nigeria Governor Olayemi Cardoso, speaking at the Eurocham Nigeria Forum in Lagos, linked the easing inflation to improved capital allocation and stable foreign exchange conditions, projecting potential interest rate cuts as lending rates hover between 32% and 36%. The CBN’s Monetary Policy Committee maintained the Monetary Policy Rate at 27.5% in July, reflecting cautious optimism.