By Christopher Ajewole 
In a positive turn for Nigeria’s economy, the nation’s inflation rate dropped for the second consecutive month, settling at 22.97% in May 2025, according to the latest data released by the National Bureau of Statistics (NBS). This represents a notable decline from the 23.71% recorded in April 2025, signalling a gradual easing of the country’s persistent price pressures.
A Significant Year-on-Year Improvement
When compared to the same period last year, the decline is even more striking. In May 2024, the inflation rate stood at 33.95%, which means inflation has fallen by 10.98 percentage points over the past 12 months. This year-on-year drop reflects improving macroeconomic conditions and a broader stabilisation trend in Nigeria’s economy.
Breakdown of Inflation Metrics
A closer look at the data reveals that both urban and rural areas are experiencing relief. The urban inflation rate was reported at 23.14% year-on-year in May, a significant reduction from 36.34% in May 2024. Similarly, the rural inflation rate dropped to 22.70%, down from 31.82% in the same period last year.
The month-on-month inflation rate also saw a decline, coming in at 1.53% in May, compared to 1.86% in April 2025, indicating a slowdown in the pace at which prices are rising.
Food and Core Inflation
One of the most encouraging developments is the sharp fall in food inflation. In May 2025, the year-on-year food inflation rate declined to 21.14%, down from 40.66% recorded in May 2024, a reduction of 19.52 percentage points. However, food prices did tick up slightly on a monthly basis, with a month-on-month increase of 2.19%.
Meanwhile, core inflation, which excludes volatile items such as food and energy, was recorded at 22.28% in May, down from 23.39% in April 2025, reflecting improving stability in non-food sectors.
What’s Driving the Decline?
Several factors have contributed to the easing inflation trend. One of the most critical is the relative stability of the exchange rate, with the naira appreciating in the Nigerian Autonomous Foreign Exchange Market (NAFEM) window. This has helped reduce the cost of imported goods and raw materials. In addition, the reduction in fuel prices has led to lower transportation and logistics costs, which in turn has eased supply-side inflation. Analysts also credit the government’s ongoing macroeconomic reforms — including monetary tightening, fiscal consolidation, and foreign exchange reforms — for fostering greater economic stability.
Economic Outlook and Implications
The moderation in inflation is expected to have a positive impact on Nigeria’s economic outlook. A more stable inflation rate can support the naira, restore consumer purchasing power, and encourage business investment and expansion. Analysts believe the country is on course for further inflation declines in the coming months, especially if the naira remains stable and current policies continue to yield results. In conclusion, Nigeria’s inflation drop to 22.97% in May 2025 is a welcome development that reflects a deceleration in price increases across key sectors. As the country builds on these gains, sustained efforts to maintain macroeconomic stability could pave the way for broader economic recovery and long-term growth.
Valentine Alexander
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