For the first time in 2025, Nigeria’s headline inflation rate has declined following a Consumer Price Index (CPI) rebase, largely driven by lower petrol costs and a stable naira. According to the National Bureau of Statistics (NBS), February’s inflation rate fell to 23.18%, down from 24.48% in January 2025.
The drop in inflation was influenced by a reduction in diesel and petrol prices, following increased domestic output from the Dangote Refinery. Diesel prices saw a significant 33% decline to ₦1,000 per liter, while petrol prices remained relatively stable, averaging above ₦800 per liter. This price adjustment had a ripple effect on the broader economy, easing cost pressures for businesses and consumers alike. Food inflation also saw a slight reduction, falling to 23.51% in February, compared to 24.08% in January.
Despite the temporary relief, economic analysts caution that the trend may not last long. Many experts believe that Nigeria is at an inflationary turning point following the CPI rebasing. Some predict that inflation could accelerate again as early as April 2025, making it difficult for the Central Bank of Nigeria (CBN) to meet its targets.
Basil Abia, co-founder of data and research firm Veriv Africa said; “my outlook for 2025, despite the rebasing, projects an average inflation rate of 31% for the year. So, we should expect worsening monthly figures later in 2025.” He attributed this projected rise to global economic pressures rather than failures of Nigeria’s policymakers, drawing parallels to how the COVID-19 pandemic impacted Nigeria’s economy in 2020.
Meanwhile, the Monetary Policy Committee (MPC) decided to maintain the interest rate at 27.50% during its February 2025 meeting. The decision was based on a review of macroeconomic indicators, including exchange rate stability, slowing fuel price increases, and the CPI rebase.
As the country navigates economic uncertainties, the coming months will determine whether the inflation slowdown is sustainable or merely a temporary reprieve.
