Inflation Slows For Second Time To 23.2% After Rebasing

Nigeria’s headline inflation rate eased to 23.2 per cent year-on-year in February 2025 compared with January, the Nigerian Bureau of Statistics (NBS) said on Monday.

This is the second consecutive drop after the NBS changed its methodology.

The NBS stated that the inflation figure eased in February, a month after it rebased its Consumer Price Index to reflect changes in consumption patterns.

The Nigerian inflation figure was adjusted sharply from 34.80 per cent in December to 24.48 per cent in January, the first major drop in over a decade, after the National Bureau of Statistics’ rebasing exercise to update data with 2024 as the base year instead of 2009.

The food inflation rate in February 2025 was 23.51 per cent on a year-on-year basis. This was 14.41 per cent lower compared to the rate recorded in February 2024 (37.92 per cent).

NBS said the significant decline in the food inflation figure is technically due to the change in the base year. However, on a month-on-month basis, the food inflation rate in February 2025 was 1.67 per cent.

On a month-on-month basis, the headline inflation rate in February 2025 stood at 2.04 per cent.

On a year-on-year basis, in February 2025, the urban inflation rate was 25.15 per cent, 8.51 percentage points lower than the 33.66 per cent recorded in February 2024. On a month-on-month basis, the urban inflation rate was 2.40 per cent in February 2025.

The corresponding twelve-month average for the urban inflation rate was 32.22 per cent in February 2025. This was 4.28 percentage points higher than the 27.93 per cent reported in February 2024.

The rural inflation rate in February 2025 was 19.89 per cent on a year-on-year basis, 10.09 percentage points lower than the 29.99 per cent recorded in February 2024. On a month-on-month basis, it was 1.16 per cent.

The corresponding 12-month average for the rural inflation rate in February 2025 was 27.94 per cent, 3.33 percentage points higher than the 24.61 per cent recorded in February 2024.

Inflation hit repeated 28-year highs last year, induced by President Bola Tinubu’s moves to end costly subsidies and devalue the naira currency after he came to power in 2023.

“In analysing price movements under this section, it should be noted that CPI is weighted by consumption expenditure patterns that differ across states and locations. Accordingly, the weight assigned to a particular food or non-food item may differ from state to state, making interstate comparisons of consumption baskets inadvisable and potentially misleading,” the NBS stated.

Last month, the NBS released the rebased inflation, which brought the country’s inflation rate down from 34.8 percent in December last year to 24.1 percent. The rebasing, which was the first in 16 years, saw the NBS update the reference year to 2024 to better capture inflationary pressures affecting Nigerian households.

At 23.18 per cent, the latest inflation is the lowest recorded in the country since June 2023, when inflation printed at 22.79 per cent.

Meanwhile, businesses are expecting to spend more on expenditures compared to households over the next six months, according to the Inflation Expectation Survey released by the Central Bank of Nigeria.

According to the report, 46.7 per cent of firms surveyed expect higher expenditure, while 32.6 per cent of households expect higher spending over the next few months. In general, households and businesses anticipate lower spending as their expectation of higher prices decreases over the next six months