Nigeria’s April 2025 CPI Report: Inflation Eases Amid Slower Price Increases

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Headline Inflation Overview (Year-on-Year and Month-on-Month)

In April 2025, Nigeria’s headline inflation rate eased to 23.71% (year-on-year), marking a slight decline from 24.23% in March 2025. This 0.52% drop is the first easing in several months and comes after a period of persistently high inflation. On a month-on-month basis, price increases decelerated sharply – April saw 1.86% inflation MoM, down from the 3.90% rise in March. In practical terms, this means that while prices are still rising, they rose at a much slower pace in April than in the previous month.

Overall trends indicate a moderating trajectory in early 2025. The inflation rate had spiked in late 2024 (hitting ~34.8% in December 2024 under the old CPI methodology) before the National Bureau of Statistics (NBS) rebased the CPI series in January 2025. After rebasing (with 2024 as the new base year and updated weights), annual inflation dropped to 24.48% in Jan 2025, then further edged down to 23.18% by February 2025, the lowest level since mid-2023. A brief uptick in March was reversed by April’s decline, suggesting that inflation may have peaked and is gradually trending downward in 2025. Notably, April’s 23.71% rate is significantly lower (by 9.99%) than the 33.69% recorded in April 2024. However, it’s important to acknowledge that part of this large year-on-year drop is due to base effects and methodology changes – April 2024 was a period of very high inflation, so the comparison makes April 2025’s inflation look much improved on paper. In summary, headline inflation has begun to moderate, but at 23.7% it remains very elevated, and prices are still increasing albeit more slowly.

Food Inflation and Core Inflation Details

Food inflation showed a notable slowdown, providing much of the relief in the April CPI report. The food inflation rate (year-on-year) fell to 21.26% in April 2025, down from about 21.8% in March. This is a dramatic drop compared to a year earlier – April 2024’s food inflation was over 40%, meaning the food price index is 19.3% YoY. The NBS made clear that this sharp decline is largely technical, resulting from the change in base year and updated weighting methodology, rather than an absolute collapse in food prices. On a month-on-month basis, food prices rose 2.06% in April, which is only slightly lower than the 2.18% increase in March. In other words, Nigerians still saw food get more expensive in April, but the pace of increase was marginally slower than in the previous month.

The moderation in food inflation was driven by actual price declines in several staple items. According to the NBS, average prices of key staples fell in April – notably maize flour, wheat grain, dried okra, yam flour, soya beans, rice, bambara beans, and brown beans became cheaper or grew more slowly in price. These are major components of Nigerian diets, so their improved supply or lower cost had a real impact on easing food inflation. The government’s earlier measures (such as suspending import duties on basic foods in mid-2023) may have also started to bear fruit in tempering food prices. Despite this respite, food inflation at 21% YoY is still very high, indicating that food costs remain a strain on households – just less so than the extreme surge seen last year.

Core inflation (which excludes volatile food and energy items) similarly slowed, suggesting broader price pressures have started to ease. In April 2025, core inflation stood at 23.39% year-on-year, down from about 26.8% a year prior. This indicates that non-food, non-energy prices are rising at a slower annual rate than before, reflecting some cooling off in underlying inflation. On a monthly basis the improvement is even more pronounced: core inflation rose just 1.34% in April (MoM), a sharp drop from 3.73% in March. The steep fall in core month-on-month inflation suggests that price hikes for goods and services like housing, transportation, clothing, etc., significantly decelerated in April. This could be due to weakened consumer demand (as high interest rates and past inflation squeeze spending power) and some stabilization in the exchange rate for imported goods. It’s a positive sign that inflationary pressure outside of food/energy is abating, as it points to a more broad-based stabilization of prices. However, at 23% core inflation YoY, the cost of essentials (like rent, transport fares, household goods) is still climbing very fast in absolute terms.

Within the CPI basket, the biggest contributors to inflation underscore the prominence of food-related costs. Food and non-alcoholic beverages accounted for about 9.5% of the headline 23.7% inflation (by far the largest share). The next biggest contributors were “Restaurants and Accommodation Services” (~3.06%) – essentially the cost of eating out and lodging – and Transport (~2.53%), followed by Housing, Water, Electricity, Gas & Other Fuels (~2.00%). These figures mean that after direct food purchases, Nigerians’ inflation is largely driven by the cost of transport (e.g. fuel and transport services) and housing/utilities, as well as the cost of prepared food/hospitality. In contrast, some categories like recreation, education or healthcare have smaller contributions. The dominance of food in the inflation mix is typical for Nigeria (food is a large portion of household spending), but it also means any relief in food prices has an outsized effect on the overall inflation rate – as we saw in April’s slowdown.

Regional and Sectoral Inflation Breakdown

Inflationary pressures in April varied widely across regions and states, reflecting local dynamics. The urban areas experienced a slightly higher inflation rate than rural areas annually – 24.29% YoY in urban vs 22.83% YoY in rural. Both are lower than a year ago (urban was 36.0% and rural 31.6% in April 2024 under the old base). However, the monthly trend diverged notably: urban inflation MoM was just 1.18% in April (a steep drop from 3.96% in March), while rural inflation MoM remained a high 3.56% (only slightly down from 3.73% in March). This suggests that in April, price increases virtually stalled in cities but remained rapid in the countryside. One interpretation is that urban prices may have stabilized faster – perhaps due to better supply or effects of a stabilized exchange rate on imported goods in cities – whereas rural areas still faced ongoing cost surges, possibly in food staples or due to distribution lags. The gap (1.18% vs 3.56% MoM) is striking, and it highlights that the inflation experience can differ dramatically depending on location.

At the state level, inflation ranged from extremely high in some areas to relatively moderate in others. Enugu State (South-East) recorded the highest headline inflation in April at 35.98% YoY, followed closely by Kebbi (North-West) at 35.13% and Niger (North-Central) at 34.85%. These rates are around 12% above the national average, indicating severe localized inflation in those states. In contrast, the slowest price increases were seen in Ondo State (South-West) at just 13.43% YoY, Cross River (South-South) at 17.11%, and Kwara (North-Central) at 17.28% – all well below the national inflation rate. Such wide disparity (from ~13% to ~36% annual inflation) suggests differing economic conditions: states like Enugu or Kebbi may be experiencing supply shocks or higher transportation costs, whereas Ondo’s much lower inflation could reflect local price stability or base effects. It's worth noting that the CPI rebasing might have also affected these state-relative calculations, but clearly some states are facing a far harsher inflation environment than others.

Even more dramatic were the short-term (monthly) inflation swings in different states. April saw some states actually register price declines compared to March, while others had extreme price spikes in just one month. For example, Oyo State recorded a -6.45% inflation rate month-on-month, meaning average prices in Oyo fell in April – similarly Osun (-4.54%) and Ondo (-3.44%) saw prices drop from their March levels. This is a rare occurrence of deflation at the state level, possibly due to harvests or specific local factors improving supply. On the flip side, Sokoto State’s prices jumped 16.26% in April over March, with Nasarawa close behind at 16.02%, and Niger State up 14.74% MoM. Such double-digit price surges in a single month are extremely high and suggest acute disruptions – for instance, conflict or fuel shortages driving sudden price hikes in those areas. These outliers underscore that Nigeria’s inflation is not uniform: local conditions (security, harvest cycles, market integration, etc.) can lead to wildly different inflation experiences across the federation.

Food inflation by state shows an even starker picture of regional variation. According to the NBS data, Benue State (in the country’s North-Central "food basket" region) suffered an astonishing 51.76% increase in food prices year-on-year, the highest in Nigeria. (Benue’s situation is so severe that its food inflation more than doubled the national food inflation rate.) By contrast, some states had relatively low food inflation – e.g. Ebonyi’s food inflation was just 7.2% YoY (the lowest), alongside Adamawa (~9.5%) and Ogun (~9.9%) which were all in single digits. This means in places like Ebonyi, food prices in April 2025 were barely higher than a year prior, whereas in Benue they were more than 50% higher. The divergence is similarly massive on a monthly basis: Benue’s food prices spiked by 25.6% in April alone, the worst in the country. In comparison, Ebonyi’s food index fell by 14.4% in April, and Kano and Ogun also saw double-digit percent drop in food prices month-on-month. These extremes highlight how local supply conditions are driving food costs – for instance, Benue, famously known as Nigeria’s "food basket", has been plagued by severe insecurity and violent conflicts that disrupted farming, causing acute food shortages and price explosions. Meanwhile, states with improving security or incoming harvests enjoyed relief in prices. Overall, the regional data reveals that while national inflation is high, the pain is not shared equally: some areas (especially conflict-affected agrarian states) are seeing far higher inflation (particularly food inflation) than others, which has important implications for targeted interventions.

Monetary Policy Implications (Interest Rates and Exchange Rate Stability)

The cooling of inflation in April – if sustained – has significant implications for Nigeria’s monetary policy. Over the past year, the Central Bank of Nigeria (CBN) had aggressively raised interest rates to combat soaring inflation, pushing the benchmark Monetary Policy Rate (MPR) to a record 27.5% by early 2025. In fact, after six consecutive rate hikes in 2024, the CBN held the rate steady at 27.50% in February 2025, expressing cautious optimism that inflation would gradually fall. The April data, showing inflation finally ticking down, reinforces the case for a continued pause on rate hikes – or even an eventual rate cut. Analysts note that the latest easing “may persuade policymakers to pause the key interest rate … at a record 27.5%” in the upcoming Monetary Policy Committee meeting. Indeed, the April inflation report was released just ahead of the May 2025 MPC meeting, and it offers a bit of respite that the worst of inflation may be over.

CBN officials will likely weigh this favorable trend against remaining risks. With inflation still at 23.7% – well above the Bank’s long-term comfort zone – the monetary stance is expected to stay tight for now. A premature rate cut could undermine the progress if it leads to a resurgence in price pressures. However, if the disinflation continues in coming months, the CBN could see room to begin easing interest rates later in the year to support economic growth. The high interest rate environment (MPR at 27.5%) has been a drag on borrowing and investment, so any clear downturn in inflation would spark debate about relieving that pressure. In short, April’s numbers boost the argument for holding rates steady or even trimming them in the near future, as opposed to further hikes.

Exchange rate stability is another key factor in policy deliberations. One driver of 2023’s inflation surge was the naira’s sharp depreciation after Nigeria moved to a more flexible exchange-rate regime in mid-2023. A more stable exchange rate in recent months has helped slow inflation, especially for imported goods. The central bank has acknowledged being “reassured by stability in the foreign exchange market” when deciding to hold rates. Going forward, maintaining a stable (or at least predictable) naira is crucial to keep imported inflation in check. The CBN’s tight monetary policy – including high interest rates – has been partly aimed at supporting the naira by curbing excess money supply and attracting capital. If inflation is easing, the CBN might cautiously consider loosening forex restrictions or boosting foreign exchange supply (for example, through recent FX remittance reforms) to strengthen the currency. That said, any interest rate cuts will be calibrated against the risk of naira weakness: a significant depreciation would directly feed into higher fuel and food prices. Thus, the policy implication is a delicate balance – continue prioritizing price stability and currency stability, even as the pressure to stimulate growth via lower rates mounts. In summary, April’s inflation relief gives the CBN a bit more breathing room: it likely means no new rate hike, potential consideration of a rate hold or cut, and an ongoing focus on anchoring inflation expectations and the exchange rate. Nigerian monetary authorities will be encouraged that their tight stance is finally yielding results, but they will remain vigilant until inflation falls to much more moderate levels.

Impact on Consumers, Businesses, and Economic Planning

For Nigerian consumers, the slight easing of inflation is a welcome development, but many are still facing a cost-of-living crisis. Even at 23.7%, inflation far outpaces income growth for most households, eroding purchasing power. Over the past year, surging prices – especially for food and transport – have inflicted considerable hardship. The spike in food prices in 2023/early-2024 (exacerbated by subsidy removal and naira devaluation) pushed millions of Nigerians further into poverty and heightened food insecurity. By April 2025, some relief is materializing: staple foods are not rising as fast, and in a few cases have become cheaper, which directly benefits consumers’ daily expenses. However, families are still struggling with cumulative price increases. For example, a bag of rice or a bottle of cooking oil costs much more today than it did two years ago, even if its month-to-month price is now steady. Many households have had to cut back on quality or quantity of food, as high prices persist. The easing inflation means that the rate of increase has slowed, which is positive – it may prevent further dramatic declines in living standards – but it does not yet reverse the high price level already attained. Consumer sentiment, as reflected in surveys, remains cautious: a substantial portion of Nigerians expect prices to keep rising (albeit moderately) in the near term. In essence, consumers will likely continue to feel the squeeze of expensive goods and services, though the hope is that the squeeze will not tighten much further if inflation keeps trending downward.

For businesses, the inflation trajectory brings a mix of challenges and some hope. High inflation over the past year raised input costs for producers and eroded consumers’ disposable income, resulting in a difficult operating environment. Small businesses, particularly in agriculture and food supply, have been hit hard – the persistent price surges led to some farms and firms shutting down or scaling back production. Entrepreneurs have had to constantly adjust prices upward just to keep up with rising costs of raw materials, fuel, and transportation. This environment favors firms that can manage inflation hedges or pass costs to consumers, while many smaller or less-capitalized businesses struggled. The April report’s indications of slowing inflation provide a glimmer of relief for businesses: if input costs start stabilizing, companies can plan with more certainty and potentially avoid incessant price hikes that scare away customers. Manufacturers and retailers will also welcome the prospect of interest rates peaking or coming down, as that could lower financing costs and improve consumer credit availability. That said, businesses remain in a high-inflation, high-interest setting for now. Profit margins have been under pressure, and frequent price adjustments are still the norm. Economic confidence is gradually improving with the inflation slowdown – for instance, the naira’s outlook has brightened and there’s cautious optimism among investors. But until inflation is firmly under control, businesses will likely remain conservative: focusing on cost control, shorter planning horizons, and hedging against currency and price volatility. In summary, the inflation easing is a positive signal for the private sector, potentially improving operating conditions in the coming months, but the enduring high rate means business risks are still elevated.

In terms of economic planning and policy, the new inflation figures will influence government budgets and strategies. Lower inflation reduces the pressure on policymakers to roll out emergency measures, such as the food security initiatives launched in 2023 when prices were sky-high. If the disinflation trend continues, fiscal planners can be more confident in the stability of the economy when projecting revenues and expenditures. For example, a slower inflation rate will affect assumptions for subsidy costs, public sector wages, and social program adjustments. (Notably, during the inflation spike, there were calls for raising minimum wage or offering cash transfers to help citizens cope; easing inflation may alleviate some of that pressure on the fiscal side.) Additionally, planning for infrastructure and development projects benefits from a more stable price environment – cost estimates for projects are less likely to be blown apart by sudden inflation surges. The government can also take credit for the improving numbers: officials have already stated that the inflation decline is “not by chance” but a result of deliberate policies. This may embolden further reforms. However, economic planners will not be complacent. They are aware that inflation is still far above target, and that real interest rates are barely positive. The high inflation of the past year taught painful lessons, and planners will aim to build resilience against future shocks – for instance, by boosting domestic food production (to curb food import dependence) and stabilizing the currency market. Moreover, the geographical disparities in inflation revealed by the report (like 50% food inflation in parts of the north-central) will inform more localized policy responses. Resources may be directed to conflict-affected agricultural zones like Benue (to restore farming activities and food supply), and safety nets may be strengthened in high-inflation states to protect vulnerable populations. In conclusion, the April CPI report gives policymakers some breathing space to recalibrate: it validates tight monetary policy so far and suggests that with prudent management (both fiscal and monetary), Nigeria might steer toward lower inflation. Economic planning will cautiously incorporate these positive signals, while still hedging against the risk of commodity price swings or other shocks that could reignite inflation.

Inflation Trajectory and Outlook (Comparative Trends)

Looking at the broader trend, Nigeria’s inflation appears to be on a downward trajectory in 2025 after reaching multi-decade highs in 2024. The comparison with previous quarters is telling: in Q4 2024, headline inflation was running in the 30–34% range (YoY), whereas by Q1 2025 it had moderated to the mid-20s (23–24%). April’s further easing to 23.7% solidifies this decline. Barring any new shock, year-on-year inflation figures in the next few months will likely continue to come in below the prior year’s levels by a large margin – recall that mid-2024 inflation was around 33–34%, so the base effect will make mid-2025 inflation look significantly lower. In fact, April 2024 was something of a peak, so April 2025’s number being ~10% lower underscores a turning point. It’s important to emphasize that much of this improvement is due to statistical base effects and the CPI rebasing (which reset the weights and base period). Underlying inflation momentum has slowed but is still present. On a month-to-month basis, the trajectory is improving but not yet low: 1.86% MoM inflation in April, while much better than nearly 4% in March, is equivalent to about 25% if annualized, which is still high. The trajectory thus suggests disinflation (slowing inflation) rather than outright low inflation.

When comparing quarterly trends, we see that Q1 2025 was the first quarter in a while to record a deceleration. If we extend the view: in 2023, inflation climbed quarter by quarter, exacerbated by the mid-year policy changes (fuel subsidy removal, naira flotation) that caused a spike in Q3/Q4 2023. Now, in 2025, the trend has reversed direction – inflation is easing quarter by quarter. Q2 2025 is on track to be lower than Q1 if April is an indicator. Analysts are cautiously optimistic that Nigeria has passed the worst of the inflationary cycle, assuming no new major shocks. Forecasts by international institutions support this cautious optimism. For instance, the World Bank projects that Nigeria’s inflation will average about 22.1% in 2025, down from an average of ~26% in 2024. This forecast implies further gradual decline in inflation through the year (possibly even into the high-teens by late 2025). The IMF’s outlook is similar, though it puts the 2025 average a bit higher (around 26.5%, likely based on pre-rebase data) – still an improvement over 2024. These projections credit the sustained tight monetary policy for anchoring expectations and foresee inflation slowing, but not crashing down to single digits anytime soon. In other words, Nigeria’s inflation is expected to remain in double digits for the foreseeable future, though at considerably lower levels than the peak.

Key risks and factors will determine the actual trajectory. A stable or strengthening currency, continued improvement in domestic food production, and avoidance of fiscal shocks (e.g. large hikes in administered prices) will help keep inflation on a downward path. Conversely, any relapse in exchange rate stability or a bad agricultural season (perhaps due to weather or insecurity) could slow or stall the inflation decline. Additionally, as the base effect from last year’s high inflation wears off toward end of 2025, the pace of disinflation may level out. The Central Bank’s credibility is another factor – so far, markets appear “cautiously optimistic” that inflation is being reined in, and inflation expectations have started to stabilize. A recent survey by the CBN showed nearly half of respondents expect prices to stay about the same or improve in the next month, although a significant fraction still fear further increases. Maintaining this confidence will be critical.

In conclusion, the April 2025 CPI report signals that Nigeria’s inflation has turned a corner, moving from an accelerating, tumultuous phase into a moderating phase. Headline, food, and core inflation indices all point to a slowdown in price rises. Regional data reveal the complexities that remain, but overall, the direction is positive. Policymakers will view this as vindication of tough decisions (tight monetary policy, difficult reforms) while remaining aware that 23% inflation is still too high for comfort. The coming months will test whether this disinflation trend holds. If it does, Nigerians can expect some relief: a gradual restoration of purchasing power and a more stable economic environment for planning. The authorities, for their part, will need to consolidate these gains by addressing the root causes of inflation – boosting food supply, safeguarding the currency, and ensuring prudent fiscal management. The road to single-digit inflation may be long, but April 2025 suggests that the journey has at least begun in the right direction.