Nigeria's annual inflation rate showed a notable decline in August 2025, easing to 20.12 per cent from 21.88 per cent recorded in July 2025. This 1.76 percentage point decrease was reported by the National Bureau of Statistics (NBS) on Monday. It is important to understand that a decline in the inflation rate does not necessarily mean a reduction in prices; rather, it indicates that the rate at which prices are increasing has slowed compared to previous months.

On a year-on-year basis, the headline inflation rate in August 2025 was 12.03 per cent lower than the 32.15 per cent recorded in August 2024. This signifies a decrease in the year-on-year headline inflation rate compared to the same month in the preceding year, using a base year of November 2009 = 100. Furthermore, on a month-on-month basis, the headline inflation rate in August 2025 stood at 0.74 per cent, which was 1.25 per cent lower than the 1.99 per cent reported in July 2025. This implies a slower rate of increase in the average price level in August 2025 compared to July 2025.

The food inflation rate in August 2025 also saw a significant drop, registering at 21.87 per cent on a yearly basis. This figure was 15.65 percentage points lower than the 37.52 per cent recorded in August 2024. Month-on-month food inflation in August 2025 was 1.65 per cent, a decrease of 1.47 per cent compared to the 3.12 per cent observed in July 2025.

The substantial decline in the annual food inflation figure is primarily attributed to a technical change in the base year. Additionally, the decrease in food inflation can be linked to a reduction in the average prices of various staple food items, including imported rice, local rice, guinea corn flour, maize flour sold loose, guinea corn (sorghum), millet, semolina, and soya milk.

The average annual rate of food inflation for the twelve months ending August 2025, over the previous twelve-month average, was 25.75 per cent, which was 11.24 percentage points lower than the 36.99 per cent recorded in August 2024. Concurrently, the Consumer Price Index (CPI) increased to 126.8 in August 2025, reflecting a 0.9-point rise from the preceding month's 125.9.

The percentage change in the average CPI for the twelve months ending August 2025 over the average for the previous twelve-month period was 24.66%, marking a 6.6% decrease compared to the 31.26% recorded in August 2024.

In terms of contributions of items to the divisional year-on-year headline index increase, food & non-alcoholic beverages contributed the most at 8.05 percent, followed by restaurants and accommodation services (2.60 percent), transport (2.15 percent), housing, water, electricity, gas & other fuel (1.69 percent), education services (1.25 percent), health (1.22 percent), and clothing & footwear (1.01 percent).

Other contributing divisions included information and communication (0.66 per cent), personal care, social protection, and miscellaneous goods and services (0.66 per cent), furnishing, household equipment, and routine household maintenance (0.60 per cent), insurance and financial services (0.09 per cent), alcoholic beverage, tobacco and narcotics (0.07 per cent), and recreation, sport and culture (0.06 per cent).

Geographically, food inflation on a year-on-year basis in August 2025 was highest in Borno (36.67 percent), Kano (30.44 percent), and Akwa Ibom (29.85 percent). Conversely, Zamfara (3.30 percent), Yobe (3.60 percent), and Sokoto (6.34 percent) experienced the slowest rise in food inflation year-on-year. On a month-on-month basis, food inflation was highest in Kaduna (9.37 per cent), Katsina (9.05 per cent), and Akwa Ibom (7.87 per cent), while Bayelsa (-9.52 per cent), Sokoto (-8.92 per cent), and Borno (-8.74 per cent) recorded a decline in food inflation.