Nigeria’s battle with high inflation may see some relief in the coming months as economic analysts project a sustained slowdown, driven largely by exchange rate stability, the ongoing harvest season, and softer global commodity prices.
The National Bureau of Statistics (NBS) recently reported that headline inflation dropped for the fourth consecutive month in July 2025, easing to 21.88% from 22.22% in June.
On a month-on-month basis, inflation stood at 1.99%, slightly higher than the 1.68% recorded in June.
Food inflation, which remains a critical driver of household expenses, moderated to 22.74% year-on-year, with a month-on-month figure of 3.12%, down from 3.25% in June.
Core inflation, which excludes volatile agricultural products and energy, also fell significantly to 21.33% in July compared to 27.47% a year earlier, reflecting easing price pressures in key non-food categories.
According to analysts at Afrinvest Consulting, the combination of early harvest inflows, relatively subdued global prices, and naira stability are expected to maintain a downward trajectory in inflation.
“We expect inflation to maintain a gradual easing in the near term,” the firm noted in its weekly report.
“However, food supply constraints and seasonal factors could slow the pace of disinflation, keeping monthly inflation relatively high.” Afrinvest projected August inflation at around 21.3% year-on-year.
Similarly, Meristem Securities said the Central Bank of Nigeria (CBN) may retain its cautious stance on interest rates, balancing the need to anchor inflation expectations with sustaining growth.
“Given persistent month-on-month pressures, the MPC is unlikely to adopt an aggressive policy shift. A cautious approach will help prevent volatility in both prices and the naira,” Meristem noted.
Despite the positive outlook, concerns remain about new policy-induced costs.
Analysts at Comercio Partners highlighted that the introduction of the 4% Free On-Board (FOB) charge, which replaces older port levies, may drive up import costs and inflationary pressures.
“The new charge raises landing costs for imports, which could filter down to consumers. While it discourages excessive imports and supports the naira, higher costs in the supply chain risk pushing inflation back up,” Comercio said.
They also pointed to the proposed hike in customs licensing fees, warning that additional charges on agents and freight forwarders would likely be passed on to consumers, creating fresh upward pressure on core inflation.
Another factor supporting inflation moderation is the decline in energy costs, partly attributed to the operational efficiency of the Dangote refinery.
According to analysts at CardinalStone Partners, the refinery’s distribution strategy, which reduces transportation expenses for fuel marketers, has helped stabilize energy prices.
“This support could offset inflation risks from food supply constraints and seasonal FX demand during the third quarter,” CardinalStone stated.
Experts caution that beyond seasonal harvests and temporary relief measures, Nigeria still faces structural inflation drivers such as insecurity in food-producing states, logistics bottlenecks, and persistent supply chain disruptions.
“Short-term disinflation will not be enough. Sustained relief requires long-term reforms in agriculture, security, and trade facilitation,” Comercio Partners stressed.
Overall, while July’s data signals a welcome respite for Nigerian households and businesses, the outlook remains mixed.
A stable naira and increased food supply from harvests are expected to support continued disinflation, but risks from policy shifts, security concerns, and high supply chain costs could undermine progress.
As Nigeria navigates this delicate balance, analysts agree that the coming months will be critical in determining whether inflation relief becomes sustainable or temporary.