Lowest inflation since 2025 yet to ease Nigerians’ cost of living

…remains highest rate among African peers

Nigeria’s inflation rate has slowed to its lowest level since the National Bureau of Statistics overhauled its methodology in January 2025, but many families are yet to feel the relief.

Prices in Africa’s most populous nation declined for the fourth consecutive month to 14.63 percent in September, from 15.39 percent in August.

The rate was 6.35 percentage points below the 20.98 percent recorded a year earlier, while monthly headline inflation slowed to 0.06 percent from 0.71 percent.

But despite this downward trend in inflation, many citizens still worry that the easing prices have failed to provide relief from the cost-of-living crisis.

Read also: Food inflation edges to 19.59% as Nigeria’s headline rate drops to 14.63%

Why falling inflation has yet to bring relief

Food prices illustrate the distinction: annual food inflation stood at 19.59 percent in September, compared with 19.57 percent in August and 20.16 percent a year earlier.

On a monthly basis, however, food inflation fell by 1.55 percent, reversing August’s 1.02 percent increase.

That monthly decline offers genuine relief, particularly for lower-income households that spend a large proportion of their earnings on food.

But one month of falling food prices cannot establish a lasting improvement in affordability.

Seasonal harvests, insecurity in farming areas, transport costs due to energy prices and distribution constraints can all influence prices.

The longer-term figures show the scale of the challenge. Average annual food inflation for the 12 months ending September stood at 15.72 percent, down from 28.37 percent a year earlier.

The pace of food-price increases has moderated substantially, but households are still contending with prices shaped by earlier inflation.

The improvement is also uneven geographically. Annual urban inflation stood at 15.64 percent in September, compared with 12.46 percent in rural areas. Monthly urban inflation rose by 0.53 percent, while the rural index fell by 0.89 percent.

The national average entail different experiences, with urban consumers continuing to face monthly price increases.

Core inflation adds another caution. Although its annual rate declined to 12.95 percent from 22.11 percent a year earlier, monthly core inflation accelerated to 1.11 percent in September from -0.06 percent in August.

This suggests that the improvement in headline inflation has not been uniform across the economy.

Read also:Nigeria’s inflation cools to lowest since 2025 despite rising energy prices

The test of reform is purchasing power

Stubbornly high prices may not bode well for President Bola Tinubu, who’s seeking a re-election in January to complete his eight-year tenure.

“The slowdown in inflation has not brought the needed relief for my family,” Adeola Lawal, a civil servant working with the Lagos government, told BusinessDay. “While some prices are dropping, it has only been marginal.”

Since assuming office in 2023, Tinubu’s administration has removed costly petrol subsidies and changed the foreign-exchange regime, measures intended to address fiscal distortions and improve the functioning of the economy. The adjustment has imposed significant costs on households and businesses.

The question remains whether stabilisation can translate into higher real incomes, more affordable essentials and stronger economic opportunities.

It is also important if Nigerians can wait for the reforms to ease their cost of living due to lack of trust in government spending.

Lower inflation can help businesses plan and reduce uncertainty, but the benefits will remain limited for households whose earnings cannot keep pace with accumulated living costs.

“The moderation in headline inflation improves the outlook for interest rates, financial planning and investment confidence,” Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said.

The monetary authorities surprisingly slashed interest rates by 350 basis points, marking its single largest cut since 2006 to 23 percent. A continued decline makes a strong case for a likely easing before the end of the year, Yusuf said.

“This development has important implications for monetary policy. With inflation moderating, the case for further monetary easing has strengthened, particularly given the elevated cost of credit and its adverse consequences for investment, working capital and productive capacity.”

Nigeria’s inflation remains high among peers

Nigeria’s inflation remains high compared with several African economies, BusinessDay analysis shows.

September readings put Egypt’s inflation at 12.8 percent, Angola’s at 8.43 percent, Kenya’s at 6.8 percent and Ghana’s at 5.2 percent.

Although differences in publication schedules prevent a definitive continental ranking, the comparison highlights the persistence of Nigeria’s price pressures.

Read also: IMF backs Nigeria’s monetary easing, says inflation fight remains unfinished

The central problem is that slower inflation does not mean a lower cost of living. It means prices are rising more slowly, not that they have returned to levels households could previously afford.

After successive increases in food, transport, electricity and other essential expenses, many families need stronger incomes, not merely a lower inflation rate, to regain purchasing power.

September’s figures provide grounds for cautious optimism. The headline rate is lower, and the monthly decline in food prices is encouraging.

Yet the rebound in monthly core inflation and continued urban price increases show why the improvement should not be confused with a broad recovery in household welfare.

The real test of Nigeria’s disinflation is not simply whether the inflation rate continues to fall, but whether household incomes begin to buy more of what families need.

Until that happens, economic progress may remain clearer in official statistics than in the daily lives of Nigerians.