Nigeria sees significant relief in food prices as naira strengthens and inflation moderates
Nigeria’s economy is witnessing a notable easing of inflationary pressures, particularly in the food sector, as the naira continues to strengthen against major foreign currencies.
Recent data from the National Bureau of Statistics (NBS) reveals that headline inflation dropped to 18.02 percent in September 2025, down from 20.12 percent in August, signaling the sixth consecutive month of decline.
Analysts say this is primarily due to currency stability, improved local production, and strategic fiscal interventions.
Naira Gains Ease Food Inflation: Understanding the Trend
The latest NBS report indicates that food inflation—the sector that affects millions of households—declined sharply from 21.87 percent in August to 16.87 percent in September 2025.
Economists attribute this to a combination of the naira’s appreciation and increased availability of local staples such as maize, rice, beans, and tomatoes.
“The naira’s steady recovery has made imported goods cheaper, which directly lowers domestic food prices,” said Daniel Onyejiuwa, head of Economics at Glorious Vision University, Edo State.
“Nigeria relies heavily on imports for essential commodities, so any improvement in currency stability immediately impacts the cost of living.”
The appreciation of the naira has also eased pressure on other cost drivers, including petroleum and transportation.
Lower landing costs of fuel reduce distribution expenses, which subsequently affects the pricing of agricultural goods in markets across the country.
Central Bank Policies Driving Currency Stability
The Central Bank of Nigeria (CBN), under Governor Olayemi Cardoso, has implemented tighter monetary policies and foreign exchange reforms aimed at stabilising the naira.
According to the governor, these efforts, combined with the unification of the exchange rate, have improved transparency and price discovery in the foreign exchange market.
“With a stable naira and tight monetary conditions, we are seeing imported inflation decline,” Cardoso noted during a recent policy briefing.
“These developments, coupled with increased food supply, are expected to sustain the downward trend in inflation.”
Experts say that the current trajectory indicates early signs of macroeconomic recovery.
“With food inflation falling to 16.87 percent and headline inflation easing for the sixth consecutive month, households are beginning to feel relief in their daily expenses,” Onyejiuwa added.
Local Agricultural Production Supports Price Moderation
The government’s agricultural interventions have also played a crucial role in easing food inflation.
Aliyu Abdullahi Sabi, Minister of State for Agriculture and Food Security, highlighted that increased local production under the National Agricultural Growth Scheme (NAGS) Agro-Pocket programme is a key factor behind the falling food prices.
“Since 2023, the government has supported large-scale production of maize, cassava, wheat, and other staples,” Sabi explained.
“These initiatives have ensured that food supply meets domestic demand, helping to stabilise prices in markets nationwide.”
The harvest season has further contributed to the reduction in staple prices.
Analysts note that when domestic production surges, reliance on expensive imports declines, thereby easing the burden on households.
Economic Implications of Currency Appreciation
While the stronger naira is beneficial for consumers, economists caution that it may have short-term implications for government revenue and export competitiveness.
Onyejiuwa observed,
“An appreciating naira may reduce the value of oil revenues in local currency terms, which could affect budget implementation. Additionally, Nigerian exports might become less competitive internationally.”
Nevertheless, the consensus among policymakers and market analysts is that the positive effects on consumer prices and inflation outweigh the potential downsides.
Lower food inflation improves household purchasing power, mitigates poverty pressures, and encourages economic stability.
Looking Ahead: Sustaining Gains in Inflation Control
Maintaining the decline in food inflation will require continued coordination between monetary authorities, agricultural stakeholders, and fiscal policymakers.
Strategies include sustaining support for domestic agriculture, improving supply chain efficiency, and ensuring stable foreign exchange conditions.
“The interplay between a stronger naira and increased local production has proven effective,” said a market analyst.
“To maintain momentum, government interventions must continue to support farmers, boost local processing, and enhance market access.”
With these measures, Nigeria could experience a sustained reduction in inflation, improved food security, and greater stability in living costs, offering hope to households and businesses alike.
As the naira continues to hold value against major currencies, economists expect that food inflation will remain on a downward trajectory, providing relief to millions of Nigerians and reinforcing confidence in the government’s economic policies.
