Nigeria’s inflation rate has dropped for the second consecutive month, signaling potential economic stabilization. According to the National Bureau of Statistics (NBS), inflation eased to 23.18% in February 2025, down from 24.48% in January. Food inflation also declined to 23.51% from 26.08% the previous month.
While experts acknowledge this trend as a positive indicator, many Nigerians are yet to experience relief in the cost of living. Several economists have shared their perspectives on the latest figures, explaining why inflation remains high despite the recorded decline.
Experts Explain the Inflation Drop
According to Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), the decline in inflation is partly due to base effects and moderation in macroeconomic volatility. He noted that a more stable exchange rate and a slight reduction in fuel prices contributed to the lower inflation figures.
“The further deceleration in inflation can be attributed to two key factors. The first is the base effect. When comparing 2025 figures to 2024, a decline is expected. The second is improved macroeconomic stability. Over the past few months, the exchange rate has been less volatile, which is significant because the exchange rate is a key driver of inflation. There has also been a slight reduction in Premium Motor Spirit (PMS) prices,” Yusuf explained.
However, he warned that 23.18% inflation is still high, and more effort is needed to ease the financial burden on Nigerians. “The government must take urgent steps to reduce the cost of essential goods, including staple foods, pharmaceuticals, and cooking gas. Another positive development is the increase in food production due to improved security in farming areas,” he added.
Professor Godwin Oyedokun, an economist at Lead City University, echoed similar sentiments, stating that the recent decline suggests inflationary pressures may be stabilizing. He attributed the decrease to factors such as improved supply chains, seasonal changes in food prices, and government interventions.
“The drop in inflation could be influenced by better supply chain conditions, seasonal factors affecting food production, and recent policy measures aimed at curbing inflation, such as subsidies or interest rate adjustments. However, despite the decline, many Nigerians still face high prices,” Oyedokun noted.
He also pointed out that inflation figures do not always match reality. “The Consumer Price Index (CPI) is an average, meaning it does not fully reflect sharp price increases in certain goods. Inflation data may also fail to capture regional price differences and the unique spending patterns of consumers,” he added.
Why Inflation Decline Has Not Reflected in Market Prices
Despite the recorded drop in inflation, many Nigerians continue to struggle with high prices of essential goods and services. Gbolade Idakolo, CEO of SD & D Capital Management, explained that the inflation figures do not necessarily reflect the real cost of living because certain fundamental economic challenges persist.
“The inflation figures are not generally reflecting on the price of goods because certain fundamentals of the economy, like the strength of the naira, exchange rates, and interest rates, remain high. These factors make it difficult for the impact of lower inflation to be felt by the people,” Idakolo explained.
He added that if the government continues to implement policies that lower production and distribution costs, Nigerians will eventually experience some relief. “If the government sustains efforts to drive down costs through targeted policies, it will only be a matter of time before people start feeling the impact of reduced inflation on the economy,” he said.
Another factor contributing to high prices despite lower inflation is Nigeria’s economic structure. Many businesses still face challenges such as high energy costs, logistics difficulties, and supply chain disruptions, all of which add to the cost of goods and services.
Impact of Inflation on Everyday Nigerians
For the average Nigerian, the drop in inflation offers little immediate relief as prices remain elevated. Many citizens continue to struggle with the rising cost of food, transportation, and healthcare. Market traders and consumers alike have expressed concerns that the economic hardship persists, despite reports of declining inflation.
A trader at Mile 12 market in Lagos, who sells staple foods like rice and beans, said she has not seen any reduction in the cost of goods. “We keep hearing inflation has gone down, but prices are still high. Suppliers tell us transportation costs are still expensive, and the dollar rate affects everything,” she said.
Similarly, a civil servant in Abuja lamented that his salary has not kept up with the rising cost of living. “The government says inflation is going down, but my expenses keep increasing. Rent, food, and transport are all expensive. We need real change, not just numbers,” he said.
The Way Forward
While the drop in inflation is a positive sign, experts believe that more needs to be done to ensure that Nigerians experience real economic relief. Addressing key challenges such as exchange rate volatility, high production costs, and weak purchasing power is crucial to translating lower inflation into tangible benefits for citizens.
Muda Yusuf emphasized that the government must focus on policies that will drive down the cost of essential goods. “The authorities should take proactive steps to make staple foods, pharmaceuticals, and other essential items more affordable. Improved security in farming areas has already contributed to increased food production, but more investment is needed to sustain this progress,” he said.
Professor Oyedokun also stressed the importance of sustainable economic policies. “Government interventions should not just focus on inflation figures but on improving the standard of living. Policies that support small businesses, reduce the cost of production, and stabilize the exchange rate will have a more meaningful impact,” he advised.
As Nigeria navigates its economic recovery, stakeholders agree that while inflation data provides a glimpse of economic trends, the real measure of success will be in how much relief it brings to the average citizen. Until then, many Nigerians continue to hope that lower inflation will soon translate into a more affordable cost of living.
