Okay News reports that the average volume of goods and services for a unit of naira continued to improve as efficient food supply and relative stability in the foreign exchange market further deflated inflationary pressure in Nigeria. The trend marks the seventh consecutive month of declining inflation in Africa’s largest economy.
Ahead of the release of the Consumer Price Index Report today by the National Bureau of Statistics, Nigeria’s official statistics agency, independent consumer surveys and econometric models surveyed yesterday were unanimous that inflation rate dropped for the seventh consecutive time. The NBS publishes monthly inflation data that measures changes in prices of goods and services consumed by Nigerian households.
Consumer surveys and economic intelligence reports surveyed by The Nation showed that headline inflation rate dropped by more than 100 basis points to around 16.35 percent in October, as against 18.02 percent recorded in September. The decline represents significant progress in Nigeria’s battle against inflation, which peaked at over 32 percent in 2024.
Nigeria has seen steady disinflation since April 2025, with a combination of improved harvest, stable forex, improving security and stable logistics driving down costs of goods and services. The disinflation trend reflects the impact of monetary and fiscal policy reforms implemented by President Bola Tinubu’s administration.
The continuing decline in inflationary pressure also raised prospects of further cut in benchmark interest rate by the Central Bank of Nigeria. The Monetary Policy Committee of the apex bank had in September signaled a reflective monetary easing, cutting the Monetary Policy Rate by 50 basis points from 27.50 percent to 27.00 percent. It was the first rate cut in five years, since September 2020.
The naira appreciated by 0.5 percent to close weekend at N1,435.00 per dollar. Nigeria’s gross forex reserves increased for the 17th consecutive week, rising by $187.11 million to close weekend at $43.54 billion. The steady accumulation of reserves has provided support for the naira and improved confidence in Nigeria’s external position.
“We maintain a positive outlook on the naira, supported by expectations of sustained forex liquidity. On the domestic front, rising non-oil exports and improving market confidence should underpin inflows, while externally, healthy forex reserves, a positive current account position, and a firmer global monetary easing are expected to reinforce foreign investor sentiment and stimulate additional forex market inflows,” Cordros Capital Group, a Lagos-based financial services firm, stated.
Coronation Group, another Nigerian investment house, predicted that headline inflation rate could fall to 16.29 percent in October, citing bumper harvest from current harvest season. Nigeria’s agricultural sector typically experiences peak harvests between September and November, which traditionally leads to lower food prices.
Analysts at SCM Capital said disinflation trend reflected gains from economic reforms, foreign exchange rate stability and seasonal food supply dynamics. SCM Capital is a Nigerian investment and research firm providing economic analysis and market intelligence.
“Inflation is projected to decline further in October 2025, supported by sustained forex stability, moderating input costs, and improved domestic supply conditions. The harvest season should further ease food prices, extending the disinflation trend,” SCM Capital stated.
“With inflation easing for six consecutive months, the Central Bank of Nigeria’s Monetary Policy Committee may consider another rate cut to stimulate growth. Overall, price pressures are expected to remain subdued, sustaining the economy’s momentum,” the firm added.
Analysts at CardinalStone, a Nigerian investment banking and asset management firm, noted that the “moderating inflation bodes well for Nigeria’s currency valuation.” According to analysts, the ongoing disinflationary trends bode well for currency valuation with the combination of a sustained current account surplus and a steady build-up in forex reserves expected to underpin further naira appreciation.
CardinalStone projected that naira would close the year within the range of N1,400 and N1,450 per dollar. The projection suggests continued stability in Nigeria’s foreign exchange market following years of volatility and multiple devaluations.
“The softer inflation outlook reinforces the case for additional monetary easing by the CBN at its November policy meeting. We expect a 100 basis points reduction in Monetary Policy Rate to 26.0 percent,” CardinalStone stated.
“Lower inflation and an expected policy rate cut are likely to drive further yield compression across the naira credit market. While the curve may remain inverted, we expect a sharper adjustment at the short end of the curve,” the firm added.
Nigeria’s inflation has been driven primarily by food prices, which account for the largest component of the consumer price index basket. Food inflation has been exacerbated by insecurity in farming communities, logistics challenges, and forex pressures that increased costs of imported food items and agricultural inputs.
