…As CPPE commends inflation slowdown, flags worrying price pressures, policy gaps
By Seun Ibiyemi
Nigeria’s headline inflation rate dipped to 22.22 per cent in June 2025, according to the latest Consumer Price Index (CPI) and Inflation Report released by the National Bureau of Statistics (NBS) in Abuja on Wednesday.
The figure represents a decline of 0.76 percentage points from the 22.97 per cent recorded in May 2025. However, the NBS noted that on a month-on-month basis, the headline inflation rate climbed slightly to 1.68 per cent in June, up from 1.53 per cent in May, indicating a faster pace in the rise of average price levels between the two months.
The increase in the month-on-month index was attributed to a rise in prices across several categories within the CPI basket. The top three contributors to the annual headline inflation were Food and Non-Alcoholic Beverages (8.89 per cent), Restaurants and Accommodation Services (2.87 per cent), and Transport (2.37 per cent).
Meanwhile, the smallest contributors were Recreation, Sport, and Culture (0.07 per cent), Alcoholic Beverages, Tobacco, and Narcotics (0.08 per cent), and Insurance and Financial Services (0.10 per cent).
Year-on-year food inflation stood at 21.97 per cent in June, significantly down by 18.90 percentage points compared to the 40.87 per cent recorded in June 2024. The sharp decline, according to the NBS, is largely due to the recent change in the CPI base year. Month-on-month, food inflation increased to 3.25 per cent from 2.19 per cent in May.
This uptick was attributed to rising prices of essential food items including dried green peas, fresh pepper, dried shrimps, crayfish, fresh meat, fresh tomatoes, plantain flour, and ground pepper.
Core inflation, which strips out volatile food and energy prices, rose to 22.76 per cent year-on-year in June. On a monthly basis, it increased to 2.46 per cent, up from 1.10 per cent in May.
Newly introduced sub-indices showed mixed trends. On a month-on-month basis, farm produce inflation fell by 13.3 per cent, and goods rose by 0.93 per cent. In contrast, services rose to 3.26 per cent from 1.79 per cent, while energy declined by 11.0 per cent compared to a marginal 0.43 per cent drop in May.
The urban inflation rate reached 22.72 per cent year-on-year in June, with a month-on-month increase of 2.11 per cent, up from 1.40 per cent in May. The rural inflation rate stood at 20.85 per cent year-on-year, while month-on-month inflation slowed to 0.63 per cent from 1.83 per cent in the previous month.
A breakdown of inflation across states showed that Borno recorded the highest year-on-year headline inflation at 31.63 per cent, followed by Abuja (26.79 per cent) and Rivers (25.91 per cent). Zamfara had the slowest annual increase at 9.90 per cent, trailed by Yobe (13.51 per cent) and Sokoto (15.78 per cent).
On a month-on-month basis, Ekiti recorded the sharpest rise at 5.39 per cent, followed by Delta (5.15 per cent) and Lagos (5.13 per cent). The lowest rates were recorded in Zamfara (-6.89 per cent), Niger (-5.53 per cent), and Plateau (-4.01 per cent).
Food inflation was highest in Borno on a year-on-year basis at 47.40 per cent, followed by Ebonyi (30.62 per cent) and Bayelsa (28.64 per cent). Katsina (6.21 per cent), Adamawa (10.90 per cent), and Sokoto (15.25 per cent) saw the smallest increases.
Month-on-month, the steepest food inflation was recorded in Enugu at 11.90 per cent, followed by Kwara (9.97 per cent) and Rivers (9.88 per cent). Conversely, Borno (-7.63 per cent), Sokoto (-6.43 per cent), and Bayelsa (-6.34 per cent) reported declines.
The NBS noted that following the recent rebasing of the CPI, the index rose to 123.4 in June 2025, representing a 2.0-point increase. The CPI base year was adjusted from 2009 to 2024, using 2023 as the reference period for expenditure weights.
Statistician-General of the Federation, Adeyemi Adeniran, explained that the rebasing was undertaken to ensure Nigeria’s economic data more accurately reflects the current economic landscape. The revision includes updated consumption patterns, emerging sectors, and improved data collection methodologies.
Prior to the official release, analysts had projected a marginal easing in headline inflation for June, citing base effects, relatively stable exchange rates, and improved food supply. Nonetheless, concerns persist due to stubbornly high food inflation, lingering insecurity, and strong demand-side pressures.
According to the Managing Director of Optimus by Afrinvest, Mr Ebo Ayodeji, the recent data aligns with expectations.
“We anticipate a further decline in headline inflation in June 2025, largely due to continued FX stability and minimal volatility in energy prices,” he said.
However, he expressed concern over stubborn food inflation, which he linked to worsening insecurity in key agricultural zones such as Benue State.
Managing Director of Rostrum Investment & Securities Ltd, Mr Olaitan Sunday, projected the June inflation figure to range between 22.4 per cent and 22.8 per cent. He attributed the moderation to a combination of statistical base effects and monetary policy adjustments.
Also commenting, executive banker Onche Samuel forecast a more pronounced drop to around 22.0 per cent, citing tighter monetary conditions and steady improvements in underlying inflation indicators.
…As CPPE commends inflation slowdown, flags worrying price pressures, policy gaps
Meanwhile, the Centre for the Promotion of Private Enterprise (CPPE) has welcomed the continued easing of Nigeria’s headline inflation rate, describing the development as encouraging, while warning of persistent structural bottlenecks and price pressures that could undermine sustained progress.
Dr Muda Yusuf, Chief Executive Officer of the CPPE, noted that Nigeria recorded its third consecutive month of decline in year-on-year headline inflation, dropping from 22.97 per cent in May to 22.22 per cent in June 2025.
However, in a statement issued on Wednesday, Dr Yusuf cautioned that the monthly inflation rate still rose from 1.53 per cent in May to 1.68 per cent in June, signalling ongoing cost pressures within the economy.
He added that food inflation climbed from 21.14 per cent to 21.97 per cent year-on-year over the same period, while core inflation rose from 22.28 per cent to 22.76 per cent.
“Despite exchange rate stability, core inflation continues to edge upward, which raises concerns,” he remarked.
Dr Yusuf attributed the persistent inflationary trend to a combination of high transport and logistics costs, insecurity across food-producing regions, foreign exchange constraints, seasonal agricultural factors, and elevated import expenses.
He called on the government to prioritise these inflationary drivers by deploying relevant trade policy instruments, lowering the cost of imported inputs, and reassessing tariff structures and the exchange rate used for import duties to reduce production and trade burdens.
While acknowledging government efforts at both federal and state levels to boost agricultural output, CPPE warned that the rapid appreciation of the CFA franc, the currency of Nigeria’s Francophone neighbours, was worsening food availability in Nigeria.
“With Nigerian products now substantially cheaper in neighbouring countries, local food supplies are coming under pressure due to increased informal exports,” Yusuf said.
“The real policy task is to scale up domestic production in order to meet internal demand.”
The think tank called for a cohesive strategy to address the structural and policy weaknesses contributing to inflation, stressing that sustainable price stability requires coordinated reforms across multiple sectors.