Nigeria’s inflation rate dropped to 23.18% in February 2025, down from 24.48% in January, according to the National Bureau of Statistics (NBS). This marks the second consecutive month of decline, following an overhaul in the Consumer Price Index (CPI) methodology. The base year for inflation calculation was updated from 2009 to 2024, reflecting a more accurate measure of price movements across the country.
A major factor in the decline was food inflation, which eased to 23.51% year-on-year in February, compared to 26.08% in January. Food prices remain a key driver of Nigeria’s inflation, given their significant weight in household spending. Despite the drop, food costs continue to be a challenge for consumers, particularly in urban and rural areas where price volatility remains high.
In response to inflationary pressures, the Central Bank of Nigeria (CBN) maintained its key interest rate at 27.5% in its first monetary policy meeting of the year. This follows six consecutive rate hikes in 2024 aimed at curbing inflation and stabilizing the naira. The decision to hold rates steady reflects confidence in ongoing economic reforms and efforts to control inflation while supporting growth.
The decline in inflation is seen as a positive signal for Nigeria’s economy, which has been undergoing structural reforms to attract investors and improve macroeconomic stability. Recent policy measures, including fiscal adjustments and foreign exchange market liberalization, have boosted investor confidence. However, challenges such as high unemployment and exchange rate fluctuations still pose risks to sustained economic recovery.
