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Inflation drops to 18.02% in six-month streak

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Nigeria’s headline inflation rate eased to 18.02 per cent in September compared to 20.12 per cent in August 2025, indicating the sixth consecutive month of deceleration in inflation.

This was disclosed by the National Bureau of Statistics in the latest Consumer Price Index published on Wednesday. This also marked the first time in three years that inflation had fallen below the 20 per cent threshold.

The rebasing of the CPI has been a driver of the decline in inflation this year, which has resulted in the first rate cut by the Monetary Policy Committee of the Central Bank of Nigeria in years. The sustained dip in inflation supports the projection by economists that the MPC may still cut the benchmark rate.

According to NBS, the September 2025 headline inflation rate decreased by 2.1 per cent compared to the previous month. On a year-on-year basis, the headline inflation rate was 14.68 per cent lower than the rate recorded in September 2024 (32.70 per cent), marking a decrease compared to the same month in the preceding year.

“However, on a month-on-month basis, the headline inflation rate in September 2025 was 0.72 per cent, which was 0.02 per cent lower than the rate recorded in August 2025 (0.74 per cent). This means that in September 2025, the rate of increase in the average price level was lower than the rate of increase in the average price level in August 2025,” disclosed part of the report.

The food inflation rate in September 2025 was 16.87 per cent on a year-on-year basis. This was 20.9 percentage points lower compared to the rate recorded in September 2024 (37.77 per cent).

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NBS said that “The significant decline in the annual 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 September 2025 was -1.57 per cent, down by 3.22 per cent compared to August 2025 (1.65 per cent). The decrease can be attributed to the rate of decrease in the average prices of maize (corn) grains, garri, beans, millet, potatoes, onions, eggs, tomatoes, fresh pepper, etc.”

Core inflation, which is all items less farm produce and energy, stood at 19.53 per cent in September 2025. On a year-on-year basis, it declined by 7.9 per cent when compared to the 27.43 per cent recorded in September 2024.

On a month-on-month basis, the core inflation rate was 1.42 per cent in September 2025, down by 0.01 per cent compared to August 2025 (1.43 per cent). The average 12-month annual inflation rate was 22.39 per cent for the 12 months ending September 2025, which was 3.25 percentage points lower than the 25.64 per cent recorded in September 2024.

Urban inflation inched up month-on-month by 0.25 per cent to 0.74 per cent from 0.49 per cent in August. However, on a year-on-year basis, it stood at 17.50 per cent, which is about 17.63 percentage points lower compared to September 2024.

The rural inflation rate in September 2025 dipped on a yearly and monthly basis. It stood at 18.26 per cent (yearly) and 0.67 per cent (monthly).

At the state level, the headline inflation rate on a year-on-year basis was highest in Adamawa (23.69 per cent), Katsina (23.53 per cent), and Nasarawa (22.29 per cent), while Anambra (9.28 per cent), Niger (11.79 per cent), and Bauchi (12.36 per cent) recorded the lowest rise in headline inflation on a year-on-year basis. On a month-on-month basis, however, NBS said the highest increases were recorded in Zamfara (9.36 per cent), Adamawa (8.15 per cent) and Nasarawa (7.49 per cent), while Niger (-8.14 per cent), Oyo (-5.56 per cent) and Bayelsa (-4.61 per cent) recorded a decline.

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Year-on-year, food inflation was highest in Ekiti (28.68 per cent), Rivers (24.18 per cent), and Nasarawa (22.74 per cent), while Bauchi (2.81 per cent), Niger (8.38 per cent), and Anambra (8.41 per cent) recorded the slowest rise. On a month-on-month basis, food inflation was highest in Zamfara (15.62 per cent), Ekiti (12.77 per cent), and Sokoto (12.55 per cent) and lowest in Akwa Ibom (-12.97 per cent), Borno (-12.95 per cent), and Cross River (-10.36 per cent).

Ahead of the release of the inflation data, the Senior Research Analyst at FXTM, Lukman Otunuga, had projected an easing in the inflation to 18.8 per cent.

He had pegged his projection on “A combination of softer food prices and a strengthening naira may have tamed price pressures. Further signs of cooling price pressures may pave the way for further rate cuts by the CBN in November to stimulate economic growth.”

The experts at Arthur Steven Asset Management also affirmed the sentiments that the MPC may cut rates at its last meeting of the year, saying, “Nigeria’s inflation eased to 18.02 per cent in September, marking the sixth consecutive month of decline following the 50 bps MPR rate cut in September. The sustained disinflation trend strengthens expectations of a possible further rate reduction at the next MPC meeting in November.”

AIICO Capital, in their Inflation Watch, said that the decline in inflation reflects the positive impact of recent government policy reforms.

“Notably, the Consumer Price Index was rebased earlier in the year to a new 2024 base year with an updated basket of goods, contributing to the sustained moderation in inflation. In addition, energy prices and the FX rate have remained stable, with the naira appreciating by 2.9 per cent in September 2025, its strongest level in 15 months. Encouragingly, both annual and monthly inflation have trended downward, easing immediate price pressures.

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“Furthermore, following the Monetary Policy Committee’s decision to cut the benchmark interest rate by 50 basis points to 27 per cent in September, the sharp decline in inflation, now approaching the 15 per cent budget benchmark, signals the possibility of further rate cuts in the Monetary Policy Rate before year-end. However, sustaining lasting price stability will require consistent policy discipline, strengthened food security measures, and continued stability in energy prices to guard against renewed volatility.”

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Nigerian states’ revenues rise 93%, but education spending drops — World Bank

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The World Bank says Nigeria’s 36 states recorded a 93 per cent increase in revenues between 2023 and 2025 but education received a declining share of the sector’s expenditure.

The bank disclosed this in its latest Nigeria Development Update, which examined how increased public revenues have influenced spending priorities across the federation.

The report was made available to the News Agency of Nigeria by the World Bank in Washington D.C.

According to the report, states’ aggregate revenues rose by approximately 93 per cent in real terms, while expenditure increased by 92 per cent during the period.

The report attributed the improvement partly to exchange-rate reforms, petrol subsidy removal, stronger revenue administration and increased allocations from the federation account.

It said states also benefited from refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.

However, education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, according to the report.

Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share increased from 1.4 per cent to 4.4 per cent.

The bank said capital expenditure increased significantly, accounting for 61 per cent of state spending, compared with 46 per cent previously.

Transport infrastructure recorded the largest increase, alongside substantial spending on housing, agriculture and other economic investments.

The report quoted Mathew Verghis, the World Bank Country Director for Nigeria, as saying that increased revenues provided the opportunity to improve infrastructure, education, healthcare, and water services.

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He said greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians.

The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue.

It, however, stressed that stronger investment in human capital was necessary to translate economic reforms into sustainable employment and improved living standards.

The report also projected average economic growth of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery.

It urged federal and state authorities to ensure that increased public revenues translated into tangible improvements in Nigerians’ welfare.

NAN

Source: punchng.com

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Nigeria promotes investment without building production capacity – UNILAG don

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A professor of Comparative Political Economy at the University of Lagos, Adelaja Odukoya, has asserted that Nigeria’s economic policies promote investment without sufficiently strengthening domestic production.

Odukoya argued that the contradiction had weakened the country’s productive foundations, with policies encouraging investment and entrepreneurship while failing to create the technological capacity, productive employment and processing industries needed to drive sustainable development.

Odukoya spoke at the maiden edition of the Adeleke University Toyin Falola Annual Lecture, held on Thursday at the Performing Arts Theatre, Adeleke University, Ede.

The lecture had as its theme, “History, Power and Accumulation: Reimagining Africa in the Globally Disorderly Order.”

Odukoya identified several contradictions in the way the Nigerian state manages economic activity.

He said, “The state promotes investment without creating conditions for technological transfer. It encourages entrepreneurship without generating sufficient productive employment.

“It expands primary-product exports while leaving processing capacity undeveloped. It constructs infrastructure without establishing strong linkages with domestic production.”

According to him, the contradictions explain why increased economic activity and accumulation do not necessarily translate into development.

“Accumulation is not synonymous with development,” Odukoya stated.

He argued that genuine development should be measured by the expansion of productive, technological, institutional and human capabilities.

“A country could attract investment, export minerals and agricultural commodities and record economic activity while still failing to build the domestic industries and technological capabilities required for long-term development,” he said.

His argument was echoed by Prof Toyin Falola, who said Africa’s vast natural resources would continue to reinforce dependency unless governments developed the industrial, technological and institutional capacity to transform them into productive power.

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Falola said Africa’s resource problem was not simply one of historical exploitation, but also the continent’s failure to convert its resource endowments into power.

“The issue, however, is not just to repeat the history of exploitation. It is more important to know how Africa turns its great resources into power,” Falola said.

He argued that Africa could not afford to remain a spectator as global economic and geopolitical arrangements continued to change, stressing that resource ownership without the capacity to add value would not guarantee influence.

Falola said the continent required a combination of knowledge, government policy and industrial capacity to change its economic position.

“There must be universities that generate new knowledge; there must be governments that translate this knowledge into policies; there must be industries that add value to the continent’s natural resources,” he said.

He added that Africa needed more than improved infrastructure and stronger economies if it wanted to exercise greater influence in the global system.

“The future of the continent will require more than just better infrastructure, improved economies, and more effective political institutions,” Falola said.

Source: punchng.com

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Import waivers, insecurity end two-year agric trade surplus

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Import waivers meant to ease hunger and insecurity on farms have led to a deficit, ending a two-year run of surpluses, as Nigeria’s agricultural trade balance swung from a N740.27bn surplus in the first half of 2025 to a N56.13bn deficit in H1 2026, according to agriculture and trade experts.

Recent foreign trade data from the National Bureau of Statistics showed that agricultural exports fell by 33.28 per cent, or N985.14bn, to N1.98tn in H1 2026 from N2.96tn in H1 2025.

Agricultural imports fell by only 8.50 per cent, or N188.74bn, to N2.03tn from N2.22tn over the same period. The gap between the two movements produced a N796.40bn swing in the trade balance.

Nigeria recorded a N365.74bn deficit in H1 2023, when imports of N926.25bn far exceeded exports of N560.51bn. The balance then turned to a N194.92bn surplus in H1 2024 before it widened to N740.27bn in H1 2025.

In separate phone interviews with The PUNCH, Agribusiness experts, including the Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, explained that recent government policy led to the shift.

Banjoko said, “Some waivers were given for products like palm oil and rice, and the import tariffs were drastically reduced. It became more favourable for people to import than to patronise local producers.”

He said the waivers on food commodities hurt domestic producers, even though lower tariffs on tractors and manufacturing equipment helped them.

According to Banjoko, “The effect is that our imports will rise above our exports. Second, we will discourage local production. Thirdly, we will be reducing employment, because some factories will shut down if they are not able to compete.”

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Banjoko also said weak funding for processors compounds the problem. He said foreign direct investment flows mainly into the capital market rather than into production and processing, so local processors cannot scale.

He urged the Federal Government to speed up the Special Agro-Industrial Processing Zones programme. “We should speed up such projects where we can produce enough for our country and start exporting, not look for shortcuts by reducing prices,” Banjoko added.

Meanwhile, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, identified two major factors behind the deficit. He said the first was the Federal Government’s decision to allow some food imports to tackle runaway inflation.

Yusuf said, “The first is the decision of the government to allow for some food imports as a result of the challenges of food inflation, which at a point was getting almost completely out of hand.”

He added that insecurity worsened the supply gap and cut export capacity, stating, “Insecurity led many farmers to leave their farms. Many of them have ended up in IDP camps, and quite a number have completely abandoned farming.”

He added that farmers cannot export without output. Yusuf said, “You can only export when you have the output.”

Yusuf also said high input costs and falling produce prices have discouraged farming. He said, “Most of these inputs are imported, so the exchange rate situation has seriously affected the cost of inputs, and the prices of produce have gone down.”

He urged the Federal Government to cut the cost of fertiliser, agrochemicals, machinery and improved seedlings. He also called for a minimum guaranteed price for agricultural produce.

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Yusuf said, “The government can establish a threshold below which, if prices fall, it will give farmers some compensation. That is the way it is done in many other economies.”

Source: punchng.com

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