- Annual inflation falls for fifth straight month as naira strengthens
- Central bank faces pressure to cut record-high 27.5% benchmark rate
ABUJA, NIGERIA – Nigeria’s annual inflation slowed for the fifth straight month in August to 20.12%, down from 21.88% in July, driven by a stronger naira and easing energy costs, official data showed.
Core inflation eased to 20.33% from 21.33%, while food inflation inched up to 21.87% from 21.74%. Month-on-month, prices rose 0.74%, compared with 3.12% in July, the National Bureau of Statistics said.
Analysts noted that the figures also reflect base effects after the statistics agency reset its inflation calculations in February, using 2024 as its new base year.
Pressure on the central bank
The slowdown could open the door for Nigeria’s Central Bank to cut its benchmark interest rate – held at a record 27.5% since November 2024 after aggressive tightening to curb runaway prices. The Monetary Policy Committee is due to meet September 23.
Yet persistent food inflation remains a concern. Governor Olayemi Cardoso has repeatedly warned about insecurity in Nigeria’s farming belt, where violent clashes between herders and farmers, coupled with jihadist attacks in the northeast and northwest, continue to disrupt food supply chains.
Inflation peaked at 34.6% last year following President Bola Tinubu’s reforms, which scrapped fuel subsidies and sharply devalued the naira. Since then, the currency has gained more than 15% against the dollar, while fuel prices have stabilised amid competition between the new Dangote Refinery and private importers.
The IMF projects inflation will ease to 18% by 2026, while Tinubu has forecast a sharper drop to 15% by year-end under his 2025 budget. Analysts say September’s meeting could mark the first rate cut since Tinubu took office in 2023.
