Nigeria’s Inflation Rate Declines in February Amid Economic Challenges

Nigeria’s inflation rate dropped to 23.18% in February 2025, the first decline of the year, due to lower petrol prices and a stable naira. Analysts expect inflation to rise again by April, as global economic factors pose challenges for the Central Bank of Nigeria’s targets. The Monetary Policy Committee maintained interest rates at 27.50% amid this backdrop.

In February 2025, Nigeria’s headline inflation experienced a decline for the first time, attributed to a Consumer Price Index (CPI) rebase, alongside reduced petrol costs and a stable naira. According to data released by the National Bureau of Statistics, the inflation rate fell to 23.18%, down from 24.48% in January 2025.

The decrease in diesel and petrol prices, buoyed by increased output from the Dangote Refinery, contributed significantly to tempering inflation. Specifically, diesel prices plummeted by 33% to ₦1,000 per liter, while petrol prices remained stable at over ₦800 per liter. Food inflation similarly decreased to 23.51%, a drop from 24.08% the previous month.

Analysts indicate that Nigeria’s inflation may be at a critical turning point following the CPI rebase and expect an acceleration as early as April. Predictions suggest that the Central Bank of Nigeria (CBN) could struggle to meet its inflation target due to external economic pressures.

Basil Abia, co-founder of data and research firm Veriv Africa, predicts an average inflation rate of 31% for Nigeria in 2025, emphasizing that the situation may worsen as the year progresses, primarily due to global economic conditions rather than solely local policy decisions.

The Monetary Policy Committee (MPC) maintained the interest rate at 27.50% in February, taking into account recent macroeconomic trends, including exchange rate stability and decreasing fuel prices.

In conclusion, Nigeria’s inflation rate has decreased for the first time in 2025, driven by stable currency conditions and declining fuel prices. However, analysts foresee potential challenges ahead, predicting an escalation in inflation rates partly due to global economic factors. Despite the recent optimism following the CPI rebase, the outlook remains cautious as policymakers navigate ongoing economic uncertainties.

Original Source: techcabal.com