Nigeria’s inflation falls below 20 %

Nigeria’s inflation rate has dropped below 20 per cent for the first time in three years, bolstering expectations that the Central Bank of Nigeria (CBN) may consider another interest rate cut when its Monetary Policy Committee (MPC) meets next month.

According to figures released by the National Bureau of Statistics (NBS) on Wednesday, annual inflation eased to 18 per cent in September, down from 20.1 per cent in August.

The figure also came in lower than the 19 per cent median estimate from a Bloomberg survey of economists. On a month-on-month basis, consumer prices rose by 0.7 per cent.

The decline was driven by increased crude oil production, which helped stabilise the naira, and a fall in the prices of key staples at the onset of the harvest season.

This marks the sixth consecutive month of disinflation, reinforcing optimism among analysts that the CBN may further ease borrowing costs at its upcoming meeting on 25 November. The MPC had, in September, cut the benchmark interest rate by 50 basis points to 27 per cent, marking the first reduction in five years.

At the time, CBN Governor Olayemi Cardoso cited the lagged effects of previous rate hikes, continued stability in the foreign exchange market, and a decline in petrol prices as key factors supporting a sustained downward trend in inflation.

However, the central bank is expected to monitor recent developments closely, including a late-September oil workers’ strike that briefly disrupted production, and operational challenges at the Dangote Refinery, which caused temporary fuel shortages.

Meanwhile, food inflation slowed sharply to 16.9 per cent in September, down from 21.9 per cent the previous month. Core inflation, which excludes volatile items such as food and energy, eased to 19.5 per cent.

Nigeria’s inflation had stayed below 20 per cent throughout 2021, averaging 16.95 per cent, before rising steadily in 2022 due to higher import costs and supply disruptions. It crossed the 20 per cent mark in August 2022 and reached record highs in subsequent years, peaking around 34 per cent in mid-2024.

Since early 2025, however, inflation has gradually declined, supported by recent improvements in the exchange rate and energy markets.

They also caution that the upcoming festive season could cause short-term spikes in prices, particularly for food and transport, even as overall inflation trends downward.