Nigeria's inflation rate dropped to 23.18% in February

Tuesday, 18 March 2025 04:45

Nigeria's inflation rate dropped to 23.18% in February - NBS

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Nigeria's inflation rate dropped to 23.18% in February - NBS

Nigeria's inflation rate has dropped to 23.18% in February 2025, down from 24.48% in January, according to data released by the National Bureau of Statistics (NBS) on Monday. This marks the second consecutive month of decline following the recent overhaul of the country's Consumer Price Index (CPI).

The February figure represents a significant 8.52% decrease compared to the 31.70% recorded in February 2024. On a month-on-month basis, headline inflation stood at 2.04% in February.

Food Inflation Also Declines

Food inflation, a key driver of the headline rate, eased to 23.51% year-on-year in February, down from 26.08% in January. This figure is 14.41% lower than the 37.92% reported in February 2024.

"Compared to January 2025, there was an observed decline in the average prices of food items like Yam tuber, Potatoes, Soya beans, Flour of maize/cornmeal, Cassava, Bambara beans (Dried), etc.," the NBS stated in its report.

Impact of Data Rebasing

The significant drop in inflation figures can be partially attributed to the NBS's recent rebasing of the Consumer Price Index. In January, the bureau changed its base year from 2009 to 2024, leading to the first major drop in inflation in over a decade, with rates falling from 34.80% in December 2024 to 24.48% in January 2025.

This rebasing reflects changes in consumption patterns since the previous base year was established. Despite the technical adjustment, the consecutive monthly declines suggest a potential easing of inflationary pressures that had reached a 28-year high in 2024 following President Bola Tinubu's economic reforms, including the end of fuel subsidies and the devaluation of the naira.

Regional Variations

The NBS report highlighted significant regional differences in food inflation:

- Highest year-on-year food inflation: Edo (33.59%), Enugu (30.72%), and Sokoto (30.19%)

- Lowest year-on-year food inflation: Kaduna (15.45%), Akwa-Ibom (15.53%), and Plateau (15.74%)

On a month-on-month basis, Sokoto (11.98%), Kogi (11.38%), and Edo (8.87%) recorded the highest food inflation rates, while Kaduna (-8.83%), Ondo (-4.78%), and Plateau (-3.73%) saw declines.

Monetary Policy Response

In response to the falling inflation, the Central Bank of Nigeria maintained its key interest rate at 27.5% during its first rate-setting meeting of the year last month, following six consecutive hikes in 2024.