Nigeria’s annual inflation rate slowed to 18.02 % in September 2025, marking the first time in three years that inflation has dipped below 20 %.
This decline follows a steady six-month disinflation trend, with inflation down from 20.12 % in August. Food inflation contributed significantly, cooling from 21.87 % to 16.87 % over the same period, aided by improved harvests and supply.
The Central Bank of Nigeria responded by cutting its benchmark interest rate by 50 basis points to 27 %, its first rate cut since 2020, citing the easing inflation outlook. While the cooling inflation is a relief to consumers and policymakers, challenges remain: inflation is still far above the long-run target of 9 %, and many households continue to face high costs for essentials.
Economists warn that sustaining this decline will require consistent fiscal discipline, stable foreign exchange inflows, and careful monetary policy. If the trend holds, more interest rate easing could follow.