Nigeria’s Inflation Drops for Fifth Consecutive Month, Sparks Calls for Interest Rate Cut

Nigeria’s Inflation dropped for fifth consecutive month and have sparked calls for interest rate cut.

NewsOnline Nigeria reports that Nigeria’s headline inflation eased for the fifth straight month in August 2025, falling to 20.12% from 21.88% in July, according to data from the National Bureau of Statistics (NBS).

The drop represents a 1.76% decline month-on-month and a sharp 12.03% fall year-on-year, compared to 32.15% in August 2024.

The moderation was driven largely by a slowdown in food prices, particularly staples such as imported and local rice, millet, semolina, flour, and maize. Food inflation slipped slightly to 21.87%, down from 21.88% in July.

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The steady decline has reignited debate over whether the Central Bank of Nigeria (CBN) should cut its benchmark interest rate, currently at 27.50%. The Monetary Policy Committee (MPC) is set to meet on September 22–23, 2025, where the issue is expected to dominate discussions.

Analysts argue that while inflation is easing, high interest rates continue to weigh on manufacturers, businesses, and consumers.

“The easing of inflation to 20.12% could push the CBN to consider a rate cut. High interest rates have stifled the real sector, and reducing them could lower the cost of goods and services,” said Gbolade Idakolo, CEO of SD & D Capital Management.

However, experts caution that the relief may not yet be felt by most Nigerians. Prof. Godwin Oyedokun of Lead City University stressed that the benefits will only be meaningful if the decline translates into real reductions in living costs.

“While this is a positive development, Nigerians still grapple with high costs due to structural economic issues like currency volatility and unemployment. The real test is whether falling inflation will improve purchasing power,” he noted.

As Nigeria battles persistent economic challenges, the CBN’s decision later this month could determine whether the country sustains its fragile progress toward price stability.