Again, inflation eases to 23.18% in February
…Food inflation drops to 23.51% as price pressures ease
…February inflation slows, but high prices persist — CPPE
…Debt service drops to $276m in February 2025 — CBN
By Seun Ibiyemi
Nigeria’s inflation rate has recorded a second consecutive monthly decline in February, offering cautious optimism for a further reduction in price pressures.
According to a report published by the National Bureau of Statistics (NBS) on Monday, the country’s headline inflation rate dropped to 23.18 percent in February 2025, down from 24.48 percent in January, marking a 1.30 percent decrease within the month.
On an annual basis, inflation declined by 8.52 percentage points from the 31.70 percent recorded in February 2024.
The NBS clarified that while these figures were calculated using a revised base year, the decrease signals a notable slowdown in price acceleration compared to the same period last year.
The month-on-month inflation rate for February stood at 2.04 percent, reflecting the extent of price increases within the month.
“In February 2025, the headline inflation rate receded to 23.18% from the January 2025 rate of 24.48 per cent.
“Observing the trend, the February 2025 headline inflation rate demonstrated a reduction of 1.30 per cent compared to the preceding month,” the NBS stated.
“On a year-on-year basis, the headline inflation rate was 8.52 per cent lower than the figure recorded in February 2024 (31.70 per cent).
“This indicates that the headline inflation rate (year-on-year) declined in February 2025 compared to the same month in the previous year (i.e., February 2024), albeit with a different base year, November 2009 = 100.
“Furthermore, on a month-on-month basis, the headline inflation rate in February 2025 stood at 2.04 per cent,” the report detailed.
While prices continue to rise, the observed deceleration suggests a gradual easing of inflationary pressures within Nigeria’s economy.
This decline coincides with the Central Bank of Nigeria’s ongoing efforts to combat inflation through monetary tightening and foreign exchange stabilisation policies.
In 2024, inflation surged due to escalating costs of goods and services, largely driven by currency depreciation, high transportation costs, and supply chain disruptions.
The food inflation rate dropped to 23.51 percent in February 2025, representing a sharp decline from 37.92 percent in February 2024, according to the latest Consumer Price Index (CPI) report from the National Bureau of Statistics (NBS).
This substantial decrease suggests a slower rate of food price hikes, although month-on-month figures indicate that food prices remain on the rise.
The report attributes the sharp year-on-year decline in food inflation partially to a change in the base year for calculations.
However, on a monthly basis, food inflation stood at 1.67 percent, reflecting a slower pace of price increases compared to January 2025. This indicates that while food costs are still rising, the rate of increase has moderated.
The NBS report noted that average prices of key food staples saw a decline in February. Essential commodities such as yam tubers, potatoes, soybeans, maize flour, cassava, and dried bambara beans experienced lower price increments than in previous months.
The moderation in food price inflation suggests a potential improvement in supply conditions or reduced pressure from exchange rate fluctuations, both of which had previously contributed to food price instability.
The report stated, “The food inflation rate in February 2025 was 23.51 per cent on a year-on-year basis. This was 14.41 per cent lower compared to the figure recorded in February 2024 (37.92 per cent). The substantial decline in the food inflation rate is technically due to the change in the base year.
“However, on a month-on-month basis, the food inflation rate in February 2025 was 1.67 per cent. Compared to January 2025, there was a noticeable reduction in the average prices of essential food items such as yam tubers, potatoes, soybeans, maize flour, cassava, and dried bambara beans.
“The average annual food inflation rate for the twelve months ending February 2025 was 34.74 per cent, which was 4.67 percentage points higher than the rate recorded in February 2024 (30.07 per cent).”
Despite this easing trend, food prices remain the primary contributor to overall inflation in Nigeria.
The food and non-alcoholic beverages category accounted for 9.28 percent of the total headline inflation rate, making it the most significant inflationary factor in the country.
On a month-on-month basis, food inflation contributed 0.82 percent, indicating that food prices continue to rise, albeit at a slower rate.
Food price inflation also varied significantly across different regions, with some states experiencing sharper increases than others.
Sokoto recorded the highest food inflation rate at 38.34 percent, followed by Edo (35.08 percent) and Nasarawa (33.53 percent).
According to the report, food inflation in these states has been exacerbated by supply chain disruptions, transportation costs, and seasonal factors affecting agricultural production.
Conversely, the lowest food inflation rates were recorded in Adamawa (12.18 percent), Ondo (13.66 percent), and Oyo (15.55 percent).
These states experienced slower food price increases, which could be linked to stronger local agricultural output and less reliance on imported food items.
On a month-on-month basis, Sokoto recorded the highest increase in food inflation at 18.83 percent, followed by Nasarawa (15.32 percent) and Kogi (11.65 percent).
In contrast, Ondo, Kaduna, and Oyo states recorded month-on-month declines in food prices, possibly reflecting local supply improvements or policy measures aimed at stabilising costs.
…February inflation slows, but high prices persist — CPPE
In response to the latest inflation data, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, noted that the further slowdown in February’s inflation rate was influenced by two key factors.
“The first is the base effect, which arises because inflation is measured on a year-over-year basis. Given that prices in 2024 were exceptionally high, the comparison with 2025 naturally reflects a lower inflation rate. This trend is likely to persist for much of the year.
“The second factor is improving macroeconomic stability, particularly in the foreign exchange market. Over recent months, fluctuations in the exchange rate have moderated, helping to curb inflation. Since currency depreciation is a major driver of price increases, a more stable exchange rate has contributed to easing inflationary pressures.
“Additionally, a marginal decline in energy costs, including petrol, diesel, and gas, has also played a role in slowing inflation.”
However, despite this deceleration, inflation remains high at 23.18 per cent, indicating that although prices are rising at a slower pace, they continue to increase. This persistent inflationary pressure continues to impact consumers, particularly in essential areas such as food, pharmaceuticals, and cooking gas.
To further contain inflation, analysts recommend that the government implement bold measures aimed at reducing the cost of staple goods, such as bread, rice, and maize. This could be achieved through strategic economic policies and targeted interventions to lower production and distribution costs.
One encouraging sign is the increase in food production, particularly in northern Nigeria, where improved security conditions have enabled farming activities to resume. If this progress is sustained, it could help stabilise food prices and provide much-needed relief to consumers.
While February’s inflation slowdown is a positive development, experts caution that proactive economic policies are still necessary to further reduce price pressures and ease the financial strain on citizens.
…Debt service drops to $276 million in February 2025 — CBN
Meanwhile, Nigeria’s total debt service payments saw a substantial decline, falling from $540 million in January 2025 to $276 million in February 2025, according to the latest data on external sector payments released by the Central Bank of Nigeria (CBN).
This reduction follows continued efforts by the federal government to restructure its debt portfolio, enhance dollar liquidity, and alleviate pressure on the foreign exchange market.
Figures published on the CBN’s website underscore the mounting strain of debt obligations on Nigeria’s external reserves and overall fiscal sustainability.
Economic analysts suggest that recent deferrals of debt repayments and negotiations with multilateral lenders may have played a role in reducing outflows during the month.
Despite the drop in debt service payments, the issuance of Letters of Credit (LCs) rose significantly, indicating increased financing of trade transactions.
According to the CBN, LCs issued in February 2025 amounted to $95.6 million, representing a 48% surge from the $64.6 million recorded in January 2025.
This sharp rise points to a rebound in import-related activities, as businesses continue to adapt to fluctuations in the naira’s exchange rate and government measures aimed at stabilising trade financing.
President Bola Tinubu recently stated that within the first 17 months of his administration, Nigeria’s revenue-to-debt service ratio had improved, falling from 97% to 65%.
The federal government has maintained active engagements with global lenders and investors in an effort to ease the country’s growing debt burden.
Meanwhile, the CBN’s monetary policy in recent months has centred on stabilising the naira, while also ensuring a balance between external debt obligations and domestic economic stability.
Data from the Debt Management Office (DMO) indicates that Nigeria’s debt servicing payments surged by 69% in the first half of 2024, reaching ¦ 6.04 trillion, compared to ¦ 3.58 trillion recorded in the same period in 2023.
This sharp increase in debt service obligations, reportedly influenced by naira depreciation on foreign debt repayments, highlights the growing financial strain on the Federal Government, as a significant portion of its revenue is allocated to debt repayment.
In a previous statement, the World Bank raised concerns over the escalating debt servicing costs that are placing immense pressure on developing nations.
Indermit Gill, the World Bank’s Chief Economist and Senior Vice President, stressed the seriousness of the situation, warning that without immediate and coordinated action, a widespread financial crisis could emerge.
Experts argue that a combination of higher oil revenues, enhanced tax collection, and strategic debt restructuring could help maintain lower debt service payments in the coming months.
However, concerns persist regarding Nigeria’s rising total debt stock and the urgent need for stronger fiscal discipline to prevent excessive borrowing and ensure long-term economic stability.
