Onome Amuge
Nigeria’s headline inflation rate eased to 22.22 per cent in June 2025, down from 22.97 per cent in May, marking the third consecutive month of a year-on-year deceleration. Data released by the National Bureau of Statistics (NBS) on Wednesday revealed a 0.75 percentage point decline from the previous month and a 11.97 percentage point drop when compared to the 34.19 per cent recorded in June 2024.
This notable annual slowdown, occurring against the backdrop of a rebased index with 2024 as the new base year, is seen to offer a potential reprieve ahead of the Central Bank of Nigeria’s (CBN) crucial Monetary Policy Committee (MPC) meeting scheduled for July 21-22, 2025.
However, a closer look at the monthly figures shows persistent price pressures. On a month-on-month basis, the headline inflation rate in June 2025 edged up to 1.68 per cent, a marginal increase from the 1.53 per cent recorded in May. This uptick indicates that while the annual pace of price increases is moderating, the rate at which average prices are rising from one month to the next is accelerating, a reflection that Nigerian households continue to face considerable cost-of-living challenges. The Consumer Price Index (CPI) itself rose from 121.4 in May to 123.4 in June, reflecting enduring price pressures, particularly across critical categories such as food, transport, and housing.
Food inflation, a critical component of Nigeria’s CPI due to its direct impact on household budgets, mirrored the headline trend on an annual basis. It dropped sharply to 21.97 per cent year-on-year in June, a fall from the 40.87 per cent recorded in June 2024. This substantial decline is largely attributed to the base year effect, which creates a lower comparative base from the previous year’s elevated figures.
However, the month-on-month dynamics for food inflation tell a different story. It surged to 3.25 per cent in June, up from 2.19 per cent in May. This acceleration was driven by notable price increases in staple items, including tomatoes, pepper, dried green peas, crayfish, shrimps, meat, plantain flour, and ground pepper, all of which are essential goods for the average Nigerian household. The average annual rate of food inflation for the twelve-month period ending June 2025 stood at 28.28 per cent, a decrease of 7.02 percentage points from the 35.3 per cent recorded over a similar period last year.
Core inflation, which strips out volatile components like agricultural produce and energy, also showed a year-on-year decline, easing to 22.76 per cent in June 2025 from 27.4 per cent in June 2024. This indicates some underlying stability in non-food prices over the longer term. Yet, similar to food inflation, core inflation on a month-on-month basis saw an increase, rising to 2.46 per cent from 1.10 per cent in May. This rebound reflects renewed pressures in non-food components, hinting at broad-based price adjustments across various sectors of the economy. The average twelve-month inflation rate for core items stood at 24.14 per cent in June 2025, marginally higher than the 24.01 per cent recorded in the corresponding period of 2024.
The NBS report also highlighted a divergence in inflation trends between urban and rural areas, as well as disparities across Nigerian states.
Urban inflation dropped to 22.72 per cent year-on-year in June, a notable decrease from 36.55 per cent in June 2024. However, on a month-on-month basis, it rose to 2.11 per cent from 1.40 per cent in May. The twelve-month average for urban inflation also declined to 28.16 per cent.
Rural inflation followed a similar pattern, easing to 20.85 per cent year-on-year from 32.09 per cent. Meanwhile, rural inflation slowed month-on-month to 0.63 per cent in June, a decrease from 1.83 per cent in May, defying the national and urban monthly acceleration. The average annual rural inflation rate stood at 24.65 per cent.
At the state level, Borno recorded the highest year-on-year all-items inflation rate at 31.63 per cent, followed by Abuja (26.79%) and Benue (25.91%). This indicates the varied impact of inflation across different regions, likely influenced by local market dynamics, security challenges, and logistics. Zamfara recorded the slowest annual increase at 9.90 per cent, followed by Yobe (13.51%) and Sokoto (15.78%).
On a month-on-month basis, states like Ekiti (5.39%), Delta (5.15%), and Lagos (5.13%) experienced the sharpest increases, reflecting intense localised price pressures. In contrast, Zamfara, Niger, and Plateau recorded monthly declines of 6.89 per cent, 5.35 per cent, and 4.01 per cent respectively.
Food inflation too showed wide state-level variations. Borno again topped the list with the most severe year-on-year food inflation at 47.40 per cent, followed by Ebonyi (30.62%) and Bayelsa (28.64%). Meanwhile, Katsina (6.21%), Adamawa (10.90%), and Sokoto (15.25%) registered the slowest food inflation rates. On a month-on-month basis for food prices, Enugu (11.90%), Kwara (9.97%), and Rivers (9.88%) saw the fastest rises, while Borno, Sokoto, and Bayelsa recorded monthly decline.
The major divisions contributing to the headline inflation index remain consistent. These include; food and non-alcoholic beverages, restaurants and accommodation services, transport, housing, electricity, gas and other fuels, education, health, and clothing and footwear. These categories represent the core expenditures of Nigerian households and underscore the persistent pressure on disposable income.
Analysts assert that while the annual easing of inflation may signal some improved stability in macroeconomic indicators and potentially offer the CBN some room for manoeuvre, the rising month-on-month rates present a major challenge. This dichotomy is seen to place the Monetary Policy Committee (MPC) in a difficult position as it convenes on Monday, July 21, and Tuesday, July 22, 2025. As it stands, the MPC will need to weigh the benefits of annual disinflation against the immediate impact of accelerating monthly price increases on consumer purchasing power.
