May 16, 2025/Cordros Report
According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation moderated by 52bps to 23.71% y/y (March: 24.23% y/y). A breakdown of the data shows food inflation easing by 53bps to 21.26% y/y, while core inflation fell by 105bps to 23.39% y/y. On a month-on-month basis, headline inflation slowed by 204bps to 1.86%, compared to 3.90% m/m in March.
On a month-on-month basis, food inflation eased by 12bps to 2.06% (March: 2.18% m/m), driven largely by a significant moderation in farm produce prices (-174bps to 0.90% m/m), partly reflecting the impact of the off-season harvest, which typically occurs between April and June. Conversely, imported food inflation rose (+77bps to 1.25% m/m), as the depreciation of the naira in April amplified the pass-through effect on imported food costs.
Similarly, core inflation fell sharply by 239bps to 1.34% m/m (March: 3.73% m/m), induced mainly by lower price increases across Utilities (-790bps to 4.34% m/m), Furnishings, Household & Equipment (-786bps to 0.21% m/m), Health (-707bps to 3.13% m/m) Clothing and Footwear (-559bps to 2.47% m/m) and Transport (-50bps to 1.52% m/m). Nonetheless, prices increased across the Education services (+657bps to 11.08% m/m), Miscellaneous, Good & Services (+356bps to 6.00% m/m) and Restaurant and Accommodation services (+46bps to 0.41% m/m).
Outlook: Inflation to Increase in the Near Term
We highlight that inflation risks remain tilted to the upside, particularly as persistent global uncertainty continues to exert pressure on naira stability. This, in turn, is expected to keep import costs elevated and contribute to overall price increases. In addition, seasonal dynamics in the agricultural cycle are likely to reinforce food price pressures. For context, May typically marks the beginning of the planting season in Northern Nigeria, overlapping with the off-season harvest, while in the Southern region, planting activities began earlier in April and are expected to continue through May. Given these seasonal patterns, food supply is likely to remain constrained relative to demand in the near term, sustaining upward pressure on food prices. Therefore, headline inflation may likely increase in May, reflecting sustained pressure across both food and core components of the consumer basket.
