Nigeria’s Inflation Rate Drops to 23.18% in February 2025

Nigeria’s inflation rate decreased to 23.18% year-on-year in February 2025, following a significant rebasing of the Consumer Price Index. Food inflation notably decreased to 23.51%, while urban inflation was reported at 25.15%, both reflecting substantial year-on-year declines. The farm inflation rate dropped to 19.89%. The data reveals ongoing shifts in Nigeria’s economic landscape, particularly following recent government reforms.

The Nigerian Bureau of Statistics (NBS) announced on Monday that the country’s headline inflation rate decreased to 23.18 percent year-on-year in February 2025, marking a decline from January. This adjustment follows the bureau’s recent rebasing of the Consumer Price Index (CPI) to better reflect current consumption patterns, utilizing 2024 as the new base year instead of 2009.

Notably, inflation decreased sharply from 34.80 percent in December to 24.48 percent in January, marking an unprecedented reduction in over a decade following the rebasing exercise. The food inflation rate also saw a significant drop to 23.51 percent year-on-year in February 2025, which is 14.41 percent lower than the 37.92 percent recorded in February 2024. It is essential to recognize that this decline partly stems from the change in the base year.

When examined month-on-month, food inflation increased by 1.67 percent, while the overall headline inflation rate rose by 2.04 percent in February 2025. The urban inflation rate was recorded at 25.15 percent on a year-on-year basis, reflecting an 8.51 percentage point decrease from the 33.66 percent in February 2024, with a month-on-month urban inflation rise of 2.40 percent.

For February 2025, the rural inflation rate stood at 19.89 percent year-on-year, marking a 10.09 percent decline from 29.99 percent in February 2024, while month-on-month rural inflation saw a rise of 1.16 percent. The twelve-month average for the rural inflation rate was 27.94 percent, which was 3.33 percentage points higher than the 24.61 percent reported in the previous year.

Recent inflation spikes reached 28-year highs, attributed to President Bola Tinubu’s policies aimed at eliminating costly subsidies and devaluing the naira after his election in 2023. The NBS emphasized the complexity in analyzing price movements due to varying consumption expenditure across different states, advising against interstate comparisons of the consumption basket.

The latest inflation figures illustrate a noteworthy decline in Nigeria’s inflation rate, primarily due to the rebasing of the Consumer Price Index. The year-on-year reductions in both urban and rural inflation highlight the impact of recent economic reforms. Nevertheless, ongoing vigilance is required as pricing dynamics remain influenced by diverse state-level consumption patterns. Overall, this data affirms the changing economic landscape in Nigeria as it grapples with inflationary pressures.

Original Source: allafrica.com