Nigeria’s inflation rate showed a modest decline for the second consecutive month in February 2025, dropping to 23.18% from 24.48% in January. This decrease, while notable, has raised concerns due to the persistent high costs of essential goods. Despite the national drop, inflation rates in states like Edo, Enugu, and Sokoto remained above 30%, with Edo reaching a peak of 33.59%. These states are experiencing severe price pressures driven by high food costs, transportation expenses, and supply chain disruptions.
The February 2025 inflation data indicates a decrease of 1.30 percentage points compared to January, and an 8.52 percentage point decrease year-on-year, from 31.70% in February 2024. However, economists suggest that while the inflation rate is slowing, the overall cost of goods remains high, particularly in the food sector, which still plays a dominant role in the inflationary trend. Food inflation was recorded at 23.51%, down significantly from 37.92% in February 2024, but it remains a major driver of the overall inflation rate.
Despite the reduction in inflation, the cost of living is still a major issue for Nigerians, as essential goods continue to see steep price increases. Experts point to the stabilization of the macroeconomic environment, alongside a drop in fuel prices and food costs, as key factors contributing to the deceleration in inflation rates. However, the base effect from the previous year’s elevated prices has also played a role in the slower inflation increase, with economists predicting that this trend may continue for the rest of 2025.
The decline in inflation is being hailed as a positive development by several stakeholders, including economists, business owners, and small-scale industrialists. While many acknowledge the improvement, they emphasize the need for more significant changes, such as lower interest rates, reduced fuel prices, and broader economic relief. If sustained, these changes could provide much-needed relief to businesses and citizens alike, and contribute to greater economic stability in Nigeria.
source: punch