Nigeria’s inflation rate has declined for the fifth consecutive month, increasing pressure on the Central Bank of Nigeria (CBN) to cut its benchmark interest rate from the current 27.50 per cent.
According to the latest data released by the National Bureau of Statistics (NBS), headline inflation dropped to 20.12 per cent in August 2025, down from 21.88 per cent recorded in July. This represents a 1.76 percentage point drop month-on-month. On a year-on-year basis, inflation fell by 12.03 percentage points compared to 32.15 per cent in August 2024, a decrease partly attributed to the Consumer Price Index (CPI) rebasing carried out earlier in the year.
Food inflation also eased slightly, falling to 21.87 per cent in August, compared to 21.88 per cent in July. The NBS noted that this was driven by a slowdown in the prices of key staples such as imported rice, local rice, millet, semolina, flour, and maize.
The continued disinflation has prompted renewed calls for the CBN’s Monetary Policy Committee (MPC) to ease interest rates. The MPC last met in July and opted to retain the Monetary Policy Rate at 27.50 per cent, despite growing appeals from manufacturers and business stakeholders for a cut.
READING: Nigeria’s inflation rate eases to 21.88% in July- NBS
Speaking, Gbolade Idakolo, Chief Executive Officer of SD & D Capital Management, said the latest inflation figures could influence the CBN’s decision during its next MPC meeting, scheduled for Monday, 22 September, and Tuesday, 23 September 2025.
He said the high-interest rate environment has made it difficult for the real sector to benefit from the easing of inflation.
“The easing of inflation to 20.12 per cent could make the CBN cut interest rates at the next MPC meeting. The policy on interest has helped reduce inflation month-on-month for four consecutive months, which signals a positive economic shift,” he said.
“However, high interest rates have hurt the manufacturing and services sectors, leading to increased costs of goods and services. A rate cut would reduce this pressure and potentially lower prices.”
Idakolo added that despite the positive trend, the impact of falling inflation has yet to be felt widely by Nigerians, due to high business costs and limited improvements in living standards.
Also commenting, Professor Godwin Oyedokun of Lead City University, Ibadan, said inflation data alone does not capture the full picture, as many Nigerians continue to struggle with high living costs.
“While the official rate shows a decline, most people still feel the burden of high prices,” he said. “If inflation figures are not matched by real reductions in the cost of goods and services, the effect on people’s lives will remain limited.”
He stressed that the effectiveness of falling inflation will depend on how quickly the changes filter through to the economy.
“Many citizens remain sceptical about whether these trends will be sustained. The true impact will depend on how prices of essentials like food respond, and whether purchasing power improves,” he said.
The August data marks the fifth straight month of inflation decline and reflects a broader trend of stabilising prices. However, until these gains translate into lower living costs and improved business conditions, pressure is likely to persist on the CBN to ease monetary policy in the months ahead.
