The Central Bank of Nigeria (CBN) announced today that the country’s inflation rate has dropped for the fifth straight quarter, a milestone not seen since the early 2000s. The Consumer Price Index (CPI) fell to 8.7 % year‑on‑year for the third month in a row, after rebounding to 8.9 % at the beginning of the period. The decline is largely driven by a sharp easing in food and staples prices, according to data released on Friday.
A Quiet but Sustained Decline The latest CPI figures, released under the “April‑May‑June 2025” statistical release, show a 0.25 % decrease in the overall index relative to March‑April 2025, bringing the quarterly inflation figure down to a 6.8 % change, the lowest since March 2008. Food prices, the largest component of the CPI, fell by 1.2 % year‑on‑year, with grain and cow‑meat prices averaging 4.3 % and 3.7 % lower, respectively. “This reflects the success of a multi‑pronged policy approach that targets both the supply side of the food economy as well as the monetary discipline,” said Professor Olabode Okafor, director of the International Monetary Fund’s Nigerian desk, in a press conference. “The fall in food prices is central to easing household costs, while the overall decline in inflation speaks to the gradual normalization of the economy.”
What’s Driving the Drop? 1. Easing Global Commodity Prices** At the end of 2024, world prices for wheat and soybean had fallen 10 % and 8 % respectively, reflecting a global surplus coupled with robust production in the U.S. and Brazil. Nigeria, a net importer of staple foods, has largely benefitted from the tighter import bills, which flowed through the domestic market in the third quarter. 2. Expanded Agricultural Output The Ministry of Agriculture’s “Agri‑Boost 2030” plan, which introduced seed subsidies, irrigation infrastructure, and a mobile technology platform for market information, has seen a measurable uptick in local production. According to the Ministry’s Quick Survey, grain production grew 3.5 % year‑on‑year, while the cattle herds increased by an estimated 1.8 % in the first half of 2025.
3. Mature Monetary Policy The CBN’s monetary policy committee (MPC) had previously tightened the policy rate from 12.75 % to 13.5 % at the last meeting in January—raising the effective rates on overnight loans, and thereby tightening market liquidity. The tightening effect was most pronounced in the second half of 2025, as the MPC held the policy rate steady, preventing a surge in credit and thereby tempering inflationary expectations.
Voices From the Front Lines Central Bank Governor, Mr. Olisa Adesanya, said, “The inflation trend we are observing is a testament to the disciplined approach our Monetary Policy Committee has pursued. Our focus has been on keeping credit growth in line with productive use, and maintaining price stability as a primary defense against the volatility that has plagued Nigeria in the past.” Finance Minister, Dr. Grace Emeka‑Okafor, added, “We are particularly pleased to see that the decline in food pricing will ultimately translate into lower cost of living for our citizens. This bodes well for our upcoming fiscal year budget forecasts, as the government will be able to leverage lower inflation expectations to tilt on fiscal consolidation.” EconTech Analyst, Mr. Marlon Olayinka, cautioned, “The current story is optimistic. The key risk remains the structural unemployment rate, which remains above 17 %. If real wages do not keep pace with productivity gains, the inflation picture could become more complex.”
Implications for Policymakers – Fiscal Policy: With inflation easing, the Treasury can afford to widen discretionary spending without triggering runaway CPI increases, potentially allowing for enhanced public investment in infrastructure. Monetary Policy: The CBN may consider a measured easing cycle in the next half‑year. However, the MPC continues to maintain a “tight but tethered” stance, citing the risk of a liquidity twist in the banking sector. Trade Policy: The strong case for widening the import of agricultural inputs—fertilizers, high‑yield seeds—persists, to support domestic food supply chains amid rising demand. Social Protection: The set‑back indicates little political pressure to introduce large scale subsidies on staples, yet the vulnerability of the urban poor remains an area for continued social safety net expansions.
Looking Ahead The National Bureau of Statistics (NBS) will publish the official CPI figures for July 2025 on the 5th of next month. The predictability of the decline suggests a continued trend until the end of 2025, but analysts warn of a possible uptick should global commodity prices reverse course, or if the Nigeria–US trade relationship deteriorates. Tagline: The fifth consecutive quarter at a downward inflation trajectory marks not only a policy success but also contributes to a more resilient economic climate for all Nigerians, though prudence remains the best policy for safeguarding the gains.