March 18, 2025/United Capital Research
The Feb-2025 Consumer Price Index (CPI) report highlights a decrease in the general prices of goods and services from Jan-2025. In Feb-2025, inflation rate fell to 23.18% y/y. This represents a 1.3 percentage point (130 basis points) decrease from Jan-2025’s 24.48%, and a significant 8.52 percentage point (852bps) drop from Feb-2024’s 31.70%.
On a month-on-month basis (m/m), February saw a sharp decline of 866bps bringing the m/m inflation down to 2.04% from 10.7% in January. This indicates a substantially slower rate of price increases in February compared to the previous month.
A key factor contributing to the sharp CPI drop in February, alongside the high-base effect, was the National Bureau of Statistics’ (NBS) rebasing of the CPI. This involved a major update, shifting the base year to 2024 and revising the composition of the goods and services basket. Similarly, Feb-2025 saw a reduction in inflationary pressure, partly due to a significant decrease in petrol prices.
With Dangote Refinery cutting petrol prices by 9.34% to N815.00 per liter, which directly lowered transportation and logistical costs. Notably, the Naira strengthened in February by 8.00% to N1,500/$ in the parallel market, howbeit, it depreciated by 1.48% to N1,500.15/$ in the official window by month-end, the convergence signified improved liquidity in the market, easing inflationary pressures that are traditionally induced by FX illiquidity.
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