The sustained moderation of Nigeria’s headline inflation for five consecutive months suggests that Nigeria is gradually regaining macroeconomic stability, according to the Centre for the Promotion of Private Enterprise (CPPE).
The centre, in its policy brief on inflation signed by its Chief Executive Officer, Dr. Muda Yusuf, on Tuesday, noted that for the fifth consecutive month in 2025, Nigeria’s headline inflation has maintained a downward trajectory signalling a steady return to price stability.
On Monday, the National Bureau of Statistics (NBS) released the Consumer Price Index (CPI) for August 2025. The report showed that the headline inflation rate eased to 20.12 per cent, down from 21.88 per cent in July, a notable 1.76 percentage point decline.
Month-on-month inflation also slowed sharply, with prices rising by just 0.74 per cent in August compared with 1.99 per cent in July, one of the lowest sequential increases in over a year.
The report also shows that food inflation moderated to 21.87 per cent from 22.74 per cent in July, while core inflation (excluding food and energy) declined to 20.33 per cent from 21.33 per cent, indicating broad-based easing in price pressures.
CPPE stated that business confidence has improved, as indicated by the NESG–Stanbic IBTC Business Confidence Monitor, which has recorded six consecutive months of positive readings in 2025.
The centre, however, believes that consumer confidence remains fragile due to persistently high food prices and weak purchasing power. “Encouragingly, consumer pessimism is gradually easing, suggesting that households are beginning to adjust expectations as inflation slows,” it noted.
Identifying factors responsible for the ongoing deceleration in inflation, CPPE listed base effects from the unusually high inflation rates recorded in 2024, stabilisation of the foreign exchange market, which has reduced imported inflation and boosted business confidence, as well as improved agricultural production from sub-national government interventions, helping to increase food supply and contain price spikes.
To consolidate and build on these gains, the centre recommends a coherent mix of fiscal, monetary, and structural reforms.
“The government should continue stabilising the exchange rate; deepen fiscal consolidation to curb deficits and manage public debt prudently,” it said.
It also stated that the federal government must address structural bottlenecks by working with state governments to remove productivity constraints, invest in infrastructure, logistics, and security to enhance output and lower costs; control money supply growth through tighter monetary and fiscal coordination; align fiscal, tax, and trade policies to reduce production and operating costs across sectors; and continue implementing targeted measures such as input subsidies, storage facilities, and mechanisation programmes to reduce food production costs and ease household budget pressures.
“If these measures are sustained, Nigeria could witness a further decline in inflation, a gradual rebound in consumer confidence, and stronger foundations for inclusive and sustainable economic growth,” it concluded.
