Nigeria’s inflation rate dropped for the second consecutive month in February 2025, falling to 23.18 per cent from 24.48 per cent recorded in January.
However, economists and Nigerians expressed concern over the drop in the country’s inflation rate amid the high cost of essential commodities nationwide.
Meanwhile, despite this overall decline in inflation, three states – Edo, Enugu, and Sokoto – recorded inflation rates exceeding 30 per cent, according to the latest Consumer Price Index report released on Monday by the National Bureau of Statistics.
Edo recorded the highest inflation rate at 33.59 per cent, followed by Enugu at 30.72 per cent and Sokoto at 30.19 per cent. This indicates that despite the general moderation in inflation nationwide, price pressures remain intense in these states.
The rise in inflation in these regions has been attributed to high food prices, increased transportation costs, and supply chain disruptions.
On a month-on-month basis, Sokoto recorded the highest inflation increase at 11.98 per cent, followed by Kogi at 11.38 per cent and Edo at 8.87 per cent, suggesting that prices in these states are still rising at a rapid pace.
The latest data showed that Nigeria’s headline inflation rate declined by 1.30 percentage points in February, reflecting a drop from 24.48 per cent in January to 23.18 per cent. Compared to the same period in 2024, when inflation stood at 31.70 per cent, the February 2025 figure represents an 8.52 percentage point decrease year-on-year.
Month-on-month, inflation was recorded at 2.04 per cent, which suggests that while prices continue to rise, the rate of increase has slowed compared to previous months.
The report read, “In February 2025, the Headline inflation rate eased to 23.18 per cent relative to the January 2025 headline inflation rate of 24.48 per cent. Looking at the movement, the February 2025 Headline inflation rate showed a decrease of 1.30 per cent compared to the January 2025 Headline inflation rate.
“On a year-on-year basis, the Headline inflation rate was 8.52 per cent lower than the rate recorded in February 2024 (31.70 per cent). This shows that the Headline inflation rate (year-on-year basis) decreased in February 2025 compared to the same month in the preceding year (i.e., February 2024), though with a different base year, November 2009 = 100.
“Furthermore, on a month-on-month basis, the Headline inflation rate in February 2025 stood at 2.04 per cent.”
Food prices remained a major factor influencing the inflation trend, with food inflation recorded at 23.51 per cent in February, a sharp drop from the 37.92 per cent reported in the same month of the previous year.
The NBS stated that part of the decline was due to a change in the base year used for inflation measurement. However, it also noted that while the inflation figures were calculated using a different base year, the decline suggests a significant slowdown in price increases compared to the same period last year.
On a month-on-month basis, food inflation was recorded at 1.67 per cent, indicating a slower rate of increase compared to the previous month.
The report highlighted that key food items such as yam tubers, potatoes, soybeans, maize flour, cassava, and dried bambara beans saw price reductions, helping to ease food inflationary pressures.
Despite the decline in food inflation, it remains the biggest contributor to the overall inflation rate, accounting for 9.28 per cent of the headline index.
Experts, OPS react
The Centre for Promotion of Private Enterprise observed that inflation remained high, with essential goods still costly despite the 1.3 per cent drop in headline inflation from January 2025.
Director of CPPE, Dr Muda Yusuf, told The PUNCH that the Federal Government has its work cut out for it as the February 23.18 per cent rate indicated that the country continues to experience increases in the price of goods and services but at a slower rate.
“The inflation rate at 23.18 per cent is still very high. This is because the (February inflation) rate indicates that there is still an increase in prices but at a slower rate,” Yusuf noted. “It also implies that there is still work to be done to ease the inflation pressure on the citizens.”
The CPPE director explained that two factors led to the further deceleration in inflation rates in February, namely, the base effect and stabilisation of the macroeconomic environment.
He explained: “When we relate the 2025 figures to 2024, we expect to see a further narrowing of the gap in inflation rates because the inflation rate is essentially year-on-year and because prices in 2024 were generally highly elevated.
“So we are using that as a baseline. Typically, when we compare that to prices in 2025, we are likely to see a significant deceleration. This trend is likely to continue for the larger part of 2025.”
On his part, Professor of Economics at Babcock University, Segun Ajibola, affirmed that the drop in energy and food costs was a major driver for the reduced inflation rate.
He said, “From all that we can see, there is a deceleration in the inflationary pressure. If we take it from the fuel price which is anchored by Dangote Refinery. During the month, the price went down to N865, then N815, and we know that the prices of consumables are influenced very significantly by the prices of fuel.
“Whatever is happening to the price of fuel is central to inflationary pressure in a cost-induced environment like ours. So, if the cost of fuel goes down, it will affect many things. We have also seen a reduction in the prices of staple food across the country, be it beans, tomatoes, yam, onions, rice, and so many other basic items. All these combined are enough to drive down the inflationary pressure.”
Also, Prof Uchenna Uzo, a marketing professor and Academic Director of the Africa Retail Academy at Lagos Business School, echoed the sentiments that the drop in the prices of fuel and food contributed to the drop in the inflation rate.
He said, “We have experienced a drop which is coming from many factors. As we know, the CPI was rebased recently which led to some recalculation of inflation reading in the country. Apart from that, usually, during the festive season, there is a higher rate of inflation because of the Christmas rush and increased spending of the people. Now that we are back in school, getting to the end of the first quarter, of course, demand is not as high as during the festive period. That is part of it.”
A member of the Nigerian Economic Summit Group, Dr Ikenna Nwosu, said the ease in inflation was a welcome development.
He said, “The reduction of headline inflation is a welcome development that should hopefully impact the socioeconomic ecosystem positively in driving down prices. Hopefully, the trend will continue in the remaining quarters of the year.”
In a similar vein, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, described the development as a positive sign for the average citizen and business owners.
“Drop in food inflation, prices of fuel and relative FX stability are major drivers of the economic gains. We look forward to it reflecting on other sectors, especially on interest rates, power, lower fuel prices, real estate and food. Our prayer is that CBN and other organs of government can sustain this inflation drive down.”
Meanwhile, the National Vice President of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, said to achieve true economic relief, prices must return to their previous levels or at least move closer to them.