Stable Naira, Harvest Season Expected to Ease Nigeria’s Inflation – Analysts
Nigeria’s inflation outlook is showing signs of relief as analysts project further easing in the coming months, supported by stable exchange rates, early harvest inflows, and softer global commodity prices. The latest figures from the National Bureau of Statistics (NBS) show that headline inflation declined for the fourth consecutive month, dropping to 21.88% in July 2025 from 22.22% in June. On a monthly basis, the inflation rate stood at 1.99%, slightly higher than June’s 1.68%, while food inflation fell marginally to 3.12% from 3.25% in the previous month.
Experts note that while the harvest season and currency stability are expected to drive disinflation, structural issues remain. The Afrinvest report forecasts August inflation at 21.3% year-on-year, citing persistent food supply constraints and seasonal demand pressures. “We expect inflation to maintain a gradual easing trajectory in the near term, supported by continued FX stability and relatively subdued global commodity prices,” Afrinvest analysts stated, while cautioning that the pace of disinflation may be limited.
However, policy-driven costs present new inflationary risks. Comercio Partners warned that the introduction of a four per cent Free On-Board (FOB) charge in August, replacing the one per cent Comprehensive Import Supervision Scheme, could increase the landing cost of imports and filter down to consumers through higher prices. The firm added that planned hikes in customs licensing fees for freight forwarders would further raise operational costs, potentially pushing up core inflation despite recent gains.
Despite these challenges, analysts see reasons for cautious optimism. Stable naira performance, the Dangote refinery’s supply strategy reducing fuel transport costs, and declining global energy prices are expected to cushion inflationary pressures in the months ahead. CardinalStone Research highlighted that sustained fuel distribution efficiencies could offset seasonal risks such as increased FX demand during the summer and lingering food inflation pressures.
Overall, Nigeria’s inflation outlook is improving but fragile. While easing commodity prices, harvest inflows, and stable foreign exchange provide near-term relief, analysts stress that structural reforms, improved security in food-producing regions, and better supply chain interventions are crucial for sustaining disinflation. Without addressing these underlying challenges, inflationary pressures may remain elevated even as headline figures show temporary relief.
Source: Punch