Hardship Persists as Inflation Rate Drops

Nigeria’s inflation rate has seen a reduction for the second month in a row, falling to 22.97% in May 2025 from 24.23% in March 2025. Nevertheless, this reduction has not provided relief for numerous Nigerians who are grappling with the elevated cost of living. The ongoing economic difficulties have left many citizens questioning whether the decline in the inflation rate is simply a statistical fluke or a true indication of economic recovery.

Food Prices Remain a Major Concern

Food inflation was recorded at 21.14% year-on-year in May, a decrease from 40.66% in May 2024. Despite this drop, food prices remain elevated, with essential items such as rice, yam, cassava flour, and maize flour witnessing considerable price hikes. For example, a 50kg bag of imported rice is priced between N60,000 and N70,000, which poses a significant challenge for low-income earners. Many Nigerians are finding it difficult to purchase basic necessities, with some compelled to cut back on their food consumption or choose less expensive alternatives.

Transport fares have not seen a significant reduction, with petrol prices fluctuating between N860 and N950 per liter. Commuters continue to incur double or triple the expenses on daily transport compared to 2023. For instance, a journey from Iyana Ipaja to Obalende now costs N1,500, an increase from N700. This rise in transport expenses has intensified the economic difficulties experienced by numerous Nigerians. The value of the naira has diminished, with an average exchange rate of N1,600 to the dollar. This situation has resulted in higher prices for imported goods, such as electronics and auto parts. Many Nigerians are finding it challenging to afford basic necessities, with some unable to buy new phones or other essential items. The naira’s diminished value has also contributed to a decline in foreign investment, further aggravating the economic circumstances.

Experts Insights

Dr. Paul Alaje, the CEO of SPM Professionals, asserts that the recent decrease in the inflation rate is primarily attributed to a statistical adjustment stemming from a change in the base year used for inflation calculations. He points out that the underlying economic conditions have not altered, and Nigerians should not anticipate immediate relief from elevated prices. Dr. Chinyere Almona, the Director-General of the Lagos Chamber of Commerce and Industry, stresses that the revised inflation statistics do not necessarily alleviate the economic difficulties experienced by Nigerians. She advocates for specific interventions aimed at mitigating inflationary pressures and enhancing economic stability.

Although the reduction in the inflation rate may enhance investor confidence, it is improbable that it will alleviate the cost of living for Nigerians in the near future. Until real wages increase and essential goods become affordable once more, the majority of Nigerians will persist in facing challenges related to the high cost of living. The government must enact policies that tackle the fundamental causes of inflation and economic distress, rather than merely depending on statistical adjustments. Only then can Nigerians hope to witness a true enhancement in their quality of life.