Nigeria Inches Closer to 15% Inflation Target as September Rate Drops to 18%

Nigeria is showing signs of easing inflationary pressures, with the latest data from the National Bureau of Statistics (NBS) revealing that the country’s headline inflation rate fell to 18.02% in September 2025 from 19.12% in August. This decline marks the sixth consecutive month of moderation and the first time in three years that inflation has dipped below the 20% threshold, offering a boost to the Federal Government’s target of reducing inflation to 15% by the end of 2025. Analysts attribute the drop to improved food supply, a more stable exchange rate, and tighter monetary policies from the Central Bank of Nigeria (CBN).

On a year-on-year basis, inflation was significantly lower than the 32.70% recorded in September 2024, while month-on-month figures showed a slight moderation, with the rate standing at 0.72% in September compared to 0.74% in August. NBS data highlights that the decrease was particularly evident in food prices, including maize, beans, garri, tomatoes, onions, and eggs. States such as Ekiti, Rivers, and Nasarawa recorded the highest food inflation, whereas Bauchi, Niger, and Anambra saw more stable prices.

President Bola Tinubu, who set the ambitious 15% inflation target in his New Year broadcast, welcomed the encouraging trend. He cited factors such as lower fuel costs, rising foreign reserves, and a stronger naira as indicators of growing economic stability. Finance Minister Wale Edun added that improved national security and higher agricultural output, coupled with increased oil production, are helping to moderate inflation. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, expressed optimism that the reforms in place could significantly reduce inflation from last year’s 34.8% peak.

Economic experts have cautiously welcomed the trend. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), said the easing of headline inflation reflects tangible results from fiscal and monetary interventions. “The latest figures show that inflationary pressures are gradually subsiding. Headline inflation has eased, food inflation has dropped sharply, and core inflation is also moderating. These are encouraging signs,” he noted. However, Yusuf stressed that persistent pressures in food, energy, housing, and healthcare sectors still pose challenges, urging the government to consolidate gains through targeted reforms.

Olatunde Amolegbe, Managing Director of Arthur Stevens Asset Management, agreed that the moderation largely stems from stable food and energy prices, though structural challenges like poor infrastructure and insecurity remain. He added that as exchange rates stabilize and interest rates ease, Nigerians could see further price relief. Analysts believe that with consistent policy measures and structural reforms, Nigeria could achieve single-digit inflation in the medium term, helping restore consumer confidence, improve welfare, and anchor economic growth.

source: punch