The National Bureau of Statistics (NBS) on Monday disclosed that Nigeria’s headline inflation rate has improved for a second straight month in May 2025, declining to 22.97 per cent year-on-year, down from 23.71 per cent in April, recent data from the National Bureau of Statistics (NBS) released Monday has revealed.
The modest decline showed further progress in Nigeria’s ongoing efforts to stabilise the economy after a turbulent 2023, when President Bola Ahmed Tinubu’s economic reforms hit the system, including the removal of fuel subsidies and naira devaluation.
The report read: “In May 2025, the headline inflation rate eased to 22.97 per cent relative to the April 2025 headline inflation rate of 23.71 per cent.
“Looking at the movement, the May 2025 headline inflation rate decreased 0.74 per cent compared to the April 2025 Headline inflation rate.”
The latest data follows a rebasing of the Consumer Price Index (CPI) in January, where the NBS adjusted the base year to 2024 from 2009 and reweighted the inflation basket to better reflect current consumption patterns.
This recalibration saw inflation recalculated at 24.48 per cent in January, down sharply from 34.80 per cent in December 2023 under the old methodology.
The data from NBS saw food inflation-a key contributor to headline inflation and a central concern for Nigerian households-also recorded a slight decline, falling to 21.14 per cent year-on-year in May from 21.26 per cent in April.
The moderation was supported by a combination of improved supply chains, seasonal harvests, and monetary interventions aimed at stabilising food prices.
Despite the drop, analysts warn that food inflation remains elevated relative to pre-reform levels, posing persistent risks to household consumption, particularly in rural areas.
According to the report, on a month-on-month basis, the headline inflation rate stood at 1.53 per cent in May 2025, lower than the 1.86 per cent recorded in April.
This indicates that while prices continued to rise, they did so at a slower pace compared to the previous month.
Food inflation remained a major driver of overall inflation as it stood at 21.14 per cent year-on-year in May, a sharp drop from 40.66 per cent recorded in the same month last year.
A closer look at the report also showed that On a month-on-month basis, however, food inflation rose to 2.19 per cent in May from 2.06 per cent in April, a development driven by increases in the prices of yam, cassava, maize flour, sweet potatoes, fresh pepper, and ogbono.
It also indicated that urban inflation stood at 23.14 per cent year-on-year, lower than 36.34 per cent in May 2024, while the monthly urban inflation was 1.40 per cent in May, slightly higher than the 1.18 per cent recorded in April.
For rural inflation, it dropped to 22.70 per cent year-on-year from 31.82 per cent in the corresponding period of 2024, while on a monthly basis, rural inflation slowed to 1.83 per cent from 3.56 per cent in April.
On core inflation which excludes volatile agricultural produce and energy, this dropped to 22.28 per cent in May from 27.04 per cent recorded in May 2024.
The month-on-month core inflation also declined to 1.10 per cent from 1.34 per cent in April.
A further analysis of the divisional contributions to the headline inflation revealed that food and non-alcoholic beverages remained the highest contributor, showing 9.20 percentage points.
The NBS listed other major contributors as restaurants and accommodation services (2.97 per cent), transport (2.45 per cent), housing, water, electricity, gas and other fuels (1.93 per cent), and education (1.42 per cent).
It also indicated that on a month-on-month basis, Bayelsa state recorded the highest rise in headline inflation at 9.11 per cent, and followed by Bauchi state (4.85 per cent) and Borno (4.42 per cent.)
However, Kaduna, Jigawa and Edo states posted the steepest monthly declines with -6.75 per cent, -4.40 per cent and -2.94 per cent respectively.
The report also showed that Borno state recorded the highest year-on-year rate at 64.36 per cent on food inflation, with Bayelsa state standing at 39.85 per cent and Taraba state (38.58 per cent.)
Katsina state recorded 6.90 per cent, Rivers state (9.18 per cent), and Kwara (11.31 per cent) as the slowest increase.
Also on a monthly basis, the trio of Bayelsa state posted the highest food inflation rates of 12.68 per cent, Cross River state (11.15 per cent) and Anambra state (9.10 per cent).
However, Katsina, Jigawa and Kaduna states recorded declines of -5.42 per cent, -4.02 per cent and -3.27 per cent respectively.
The inflation slowdown is expected to bolster investor confidence, especially in Nigeria’s fixed income and equities markets, where participants have remained cautious amid macroeconomic volatility.
Financial analysts said that the sustained moderation in inflation, along with further naira stability, could enhance foreign portfolio inflows, deepen financial market liquidity, and support economic recovery.
While the moderation in inflation is a welcome relief for policymakers, there is need for the government to be vigilant as the key downside risks include volatile global commodity prices, continued pressure on food supply chains, and uncertainty surrounding Nigeria’s fiscal consolidation efforts.
It could be recalled that at the last Monetary Policy Committee (MPC) meeting in May, the Central Bank of Nigeria (CBN) decided to hold the benchmark interest rate steady for a second consecutive time, following six rate hikes in 2023.
The apex bank is focused now on maintaining policy consistency to anchor inflation expectations and ensure medium-term price stability.