Nigeria’s Headline Inflation dropped to 23.18% in February 2025.

A report by the National Bureau of Statistics (NBS), said the inflation figure fell from the 24.48% recorded in January following the rebasing of Nigeria’s Consumer Price Index (CPI).

The update of the CPI made 2024 the base year for price increment instead of 2009 practised before. The new figure still falls short of the 15% targeted by the federal government in 2025.

“Looking at the movement, the February 2025 Headline inflation rate showed a decrease of 1.30% compared to the January 2025 Headline inflation rate. On a year-on-year basis, the Headline inflation rate was 8.52% lower than the rate recorded in February 2024 (31.70%). This shows that the Headline inflation rate (year-on-year basis) decreased in February 2025 compared to the same month in the preceding year (i.e., February 2024), though with a different base year, November 2009 = 100”.

It added that Food inflation rate in February 2025 was 23.51% on a year-on-year basis, which is 14.41% lower compared to the rate recorded in February 2024 (37.92%).

It said the significant decline in the food inflation figure is technically due to the change in the base year.

“However, on a month-on-month basis, the Food inflation rate in February 2025 was 1.67%. Compared to the month of January 2025, there was an observed decline in the average prices of food items like Yam tuber, potatoes, soya beans, Flour of maize/cornmeal, cassava, bambara beans (Dried), etc.”

“The average annual rate of Food inflation for the twelve months ending February 2025 over the previous twelve-month average was 34.74%, which was 4.67% points higher compared with the average annual rate of change recorded in February 2024 (30.07%).”

It added that Food inflation on a Year-on-Year basis was highest in Sokoto (38.34%), Edo (35.08%), Nasarawa (33.53%), while Adamawa (12.18%), Ondo (13.66%) and Oyo (15.55%) recorded the slowest rise in Food inflation on Year-on-Year basis. But on a Month-on-Month basis, food inflation was highest in Sokoto (18.83%), Nasarawa (15.32%), and Kogi (11.65%) while Ondo (-9.81%), Kaduna (-8.91%), and Oyo (-6.42%) recorded decline.

Speaking on the inflation figure, a Professor of capital Market, Prof. Uche Uwaleke, saod the reduction in the inflation rate reported for February 2025 to 23.18% will have positive impact on the stock market.

“Disinflation is normally a positive development for the equities market in view of the inverse relationship between inflation and stock prices. The increase in real rate of returns in the equities market following decelerating inflation rate is an incentive to investors in the stock market.”

“In the months ahead, I expect the MPC of the CBN to respond to this development, especially if sustained, with a cut in the benchmark policy rate which will ultimately lower yields in the fixed income market and trigger investors portfolio diversification in favour of equities.”