Inflation continues downward trajectory for the fifth month

• Continued sustenance a boost for consumer confidence, says Yusuf

Nigeria’s headline inflation continued its downward trajectory for the fifth consecutive month in August 2025, signalling a steady return to price stability. The inflation rate eased to 20.12 per cent, down from 21.88 per cent in July, representing a notable 1.76 percentage point decline.
Month-on-month inflation also slowed sharply, with prices rising by just 0.74 per cent in August compared with 1.99 per cent in July, signaling one of the lowest sequential increases in over a year.
The key inflation contributors to inflation in August, largely food and alcoholic beverage; restaurants and accommodation services and transport and energy costs, remained largely unchanged.
For instance, food inflation moderated to 21.87 per cent from 22.74 per cent in July, while core inflation (excluding food and energy) declined to 20.33 per cent from 21.33 per cent, indicating broad-based easing in price pressures.
According to the Chief Executive, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, this sustained moderation suggests that Nigeria is gradually regaining macroeconomic stability, suggesting that business confidence has improved, as shown by the NESG–Stanbic IBTC Business Confidence Monitor, which has posted six consecutive months of positive readings in 2025.
However, Yusuf noted, consumer confidence remains fragile due to persistently high food prices and weak purchasing power. Encouragingly, he further noted, consumer pessimism is gradually easing, suggesting that households are beginning to adjust expectations as inflation slows.
He explained that several factors underpin the continued deceleration in inflation; notably, base effects from the unusually high inflation rates recorded in 2024; stabilisation of the foreign exchange market, which has reduced imported inflation and improved business confidence, and improved agricultural production from sub-national government interventions, helping boost food supply and contain price spikes
Yusuf, an economist, suggested that to consolidate and build on these gains, a coherent mix of fiscal, monetary, and structural reforms will be critical. These, he explained, will include the need to continue to maintain macroeconomic stability by way of continued stability of the exchange rate and deepening of fiscal consolidation to curb deficits and manage public debt prudently.
Besides, there is the need to address structural bottlenecks through collaboration with state governments to remove productivity constraints and investment in infrastructure, logistics and security to improve output and reduce costs.
The CPPE boss also advocated for the strengthening of policy coordination by moderating money supply growth through tighter monetary-fiscal coordination and aligning fiscal, tax and trade policies to reduce production and operating costs across sectors. Importantly, he added, there is the need to enhance food security through the implementation of targeted interventions such as input subsidies, storage facilities and mechanisation programmes to lower food production costs and ease pressure on household budgets.
“If these measures are sustained, Nigeria could witness a further decline in inflation, a gradual rebound in consumer confidence and stronger foundations for inclusive and sustainable economic growth,” Yusuf assured.