Nigeria’s August inflation report: Signaling hope amid economic pressures
Orisemeke Benjamin
In a welcome respite for Nigerian households grappling with soaring living costs, the National Bureau of Statistics (NBS) has reported a notable slowdown in inflation for August 2025. The headline inflation rate dipped to 20.12%, marking a 1.76 percentage point decline from the 21.68% recorded in July. This easing comes as the federal government intensifies efforts to stabilize the economy through monetary policies and subsidy reforms, though analysts caution that underlying pressures remain formidable.
The NBS’s latest CPI & Inflation Report, released on September 16, 2025, underscores a month-on-month moderation in price increases, with the headline rate falling to 0.74%—a 1.25 percentage point drop from July’s 1.99%. “This means that in August 2025, the rate of increase in the average price level was lower than the rate recorded in July,” the report states plainly, highlighting a subtle shift in consumer price dynamics.
At the heart of this data is the Consumer Price Index (CPI), which climbed to 126.8 points in August, up 0.9 points from July’s 125.9. The CPI, a key barometer of inflation, measures the average change over time in prices paid by urban consumers for a market basket of goods and services. While the year-on-year figure remains elevated—reflecting persistent challenges like naira depreciation and supply chain disruptions—the sequential slowdown offers a tentative sign of stabilization.
Breakdown: Food and core inflation under the microscope
Delving deeper, the report reveals divergent trends across inflation categories. Food inflation, a perennial pain point for Nigeria’s predominantly agrarian economy, eased to 25.25% year-on-year in August, down from 27.32% in July. Staples such as bread, cereals, and tubers saw moderated price hikes, attributed partly to improved harvests in key producing regions like the North Central and Southwest. However, month-on-month food price growth stood at 1.02%, still signaling ongoing volatility in agricultural markets battered by insecurity and climate variability.
Core inflation, which strips out volatile food and energy components, also trended downward to 17.84% year-on-year, a 1.42 percentage point reduction from the prior month. This category—encompassing housing, utilities, and transport—benefited from slight relief in electricity tariffs and fuel subsidies, though transportation costs remained stubbornly high due to lingering effects of the 2023 fuel price deregulation.
Urban and rural divides were evident: Urban inflation averaged 21.45% year-on-year, higher than the rural rate of 18.89%, underscoring the disproportionate burden on city dwellers reliant on imported goods.
Contextualizing the numbers: A broader economic canvas
This August report arrives against a backdrop of mixed macroeconomic signals. Nigeria’s real GDP expanded by 4.23% year-on-year in Q2 2025, driven by a robust 20.46% surge in the oil sector—up 10.38 points from the previous year—thanks to higher global crude prices and increased production quotas. Yet, non-oil sectors like manufacturing grew a modest 1.60%, hampered by high input costs and power shortages.
The inflation dip aligns with the Central Bank of Nigeria’s (CBN) aggressive rate hikes, with the benchmark interest rate reaching 26.75% earlier this year. Economists credit these measures for curbing excess liquidity, but warn of risks to growth if borrowing costs continue to climb.
“While the slowdown is encouraging, it’s fragile—dependent on sustained forex stability and harvest yields,” noted Dr. Aisha Bello, an economist at Lagos Business School.
Government interventions, including the release of 60,000 metric tons of grains from strategic reserves in July, have also played a role in tempering food prices. President Bola Tinubu’s administration has touted these steps as part of a “Renewed Hope” agenda, aiming to lift millions out of poverty amid projections of 40 million Nigerians facing acute food insecurity in 2025.
Challenges ahead: Inflation’s lingering shadow
Despite the positive tilt, August’s figures mask deeper structural challenges. The naira’s 45% depreciation against the dollar since mid-2024 has inflated import bills, hitting everything from pharmaceuticals to construction materials. Energy costs, too, remain a flashpoint: Petrol prices hovered around ₦680 per liter in August, fueling transport and logistics expenses.
Moreover, regional disparities persist. States like Borno and Zamfara, scarred by insurgency and flooding, reported food inflation exceeding 30%, per NBS zonal breakdowns. Youth unemployment, at 53% for ages 15-24, further erodes purchasing power, potentially stoking social unrest.
Looking forward, the NBS anticipates inflation to hover between 19-21% through Q4 2025, contingent on oil revenues and harvest outcomes.
“Timely data like this empowers policymakers to act decisively,” the bureau emphasized in its report, reaffirming its mandate to deliver “credible and relevant” statistics for evidence-based decisions.
A call for sustained momentum
As Nigeria navigates this delicate economic tightrope, the August 2025 report serves as both balm and cautionary tale. The inflation slowdown is a hard-won victory, but sustaining it demands bold, coordinated action: bolstering agricultural security, diversifying exports beyond oil, and fostering private sector investment.
For everyday Nigerians—from market traders in Aba to salary earners in Abuja—these numbers translate to marginally fuller plates and lighter wallets. Yet, true relief will hinge on translating data insights into tangible reforms. As the NBS continues its vigilant watch, all eyes turn to September’s figures for confirmation of this nascent recovery.
