ABUJA | Jun 2025 – AfricaHeadline
Nigeria’s annual inflation rate slowed to 23.71% in April 2025, down from 24.23% in March, according to data released by the National Bureau of Statistics (NBS) on Thursday. This marks the first monthly deceleration in nearly six months and comes amid a broader government campaign to restore macroeconomic stability after a turbulent reform phase that began in 2023.
AfricaHeadline Reports Team
editorial@africaheadline.com
While the drop may appear marginal, it offers a flicker of hope for policymakers under mounting pressure to tame inflation that reached 28-year highs last year, peaking at 29.9% in November 2024. The government of President Bola Ahmed Tinubu has pursued aggressive market reforms that have included the removal of fuel subsidies, the floating of the naira, and fiscal consolidation—all of which, though applauded by international financial institutions, have triggered deep cost-of-living strains for ordinary Nigerians.
Experts attribute the slowdown in inflation to a mix of seasonal agricultural improvements, currency stabilisation, and tight monetary policy:
The month of April benefited from an improved harvest during the dry season in the Middle Belt and North West, helping ease pressure on staple food items. Monthly food inflation dropped slightly from 31.7% to 30.1%, though it remains worryingly high by global standards.
The naira appreciated by roughly 6.5% between late March and mid-April, trading at an average of ₦1,185 to the US dollar in the official market. This appreciation was driven by increased crude oil exports, which brought in an estimated US$3.1 billion in oil receipts, and by remittances from Nigerians abroad—totalling US$2.8 billion in Q1 2025.
The Central Bank of Nigeria (CBN) maintained its benchmark interest rate at 24.75%, one of the highest in sub-Saharan Africa, in an effort to reduce liquidity and discourage speculative activities in the forex market. The CBN also continued with Open Market Operations (OMOs) to mop up excess cash from the system.
Despite the encouraging data, economists warn that Nigeria’s inflationary environment remains fragile:
Fuel Price Instability: Since the removal of subsidies, fuel prices are subject to market fluctuations. In early April, short-term shortages in Lagos and Abuja led to a 6.8% spike in transportation costs, which in turn affected food distribution networks.
Labour Demands and Minimum Wage Pressure: Labour unions are demanding a new minimum wage of ₦75,000—up from the current ₦30,000. If approved without counterbalancing productivity or fiscal reform, this could reignite inflationary pressures.
Security Threats in Agricultural Zones: Armed banditry and insurgency in the North-East and North-Central regions continue to disrupt food production and increase logistics costs.
Foreign Exchange Market Volatility: Nigeria’s reserves—now at US$34.5 billion—remain vulnerable to external shocks. A drop in global oil prices below $70 per barrel could quickly undermine naira stability.
GDP Growth: Nigeria’s GDP expanded by 3.4% in Q1 2025, supported by gains in telecommunications, agriculture, and banking.
Stock Market Surge: The Nigerian Exchange Group’s All-Share Index (NGX ASI) rose by 17.5% in the first four months of 2025, outperforming most West African peers.
Credit to the Private Sector: Bank lending to small and medium enterprises increased by 12.9% year-on-year, indicating improved access to credit in key sectors like agri-processing, fintech, and logistics.
FDI Commitments: New foreign direct investment commitments reached US$1.7 billion in Q1, led by deals in gas processing, agro-industrial zones, and digital infrastructure.
At the bustling Tejuosho Market in Yaba, traders say they’ve seen minor price adjustments, but many Nigerians remain unconvinced that meaningful relief is near.
“Tomatoes are cheaper than last month, but rice, oil, and beans are still going up,” said Zainab Lawal, a vegetable seller. “The rich feel the numbers; we feel the hunger.”
“The naira may be rising on paper, but the prices in the market don’t drop as fast,” added Johnson Obi, a retail wholesaler of food staples.
In response to persistent inflationary pressures and socio-economic inequalities, the Nigerian government has begun implementing a multi-pronged policy strategy aimed at restoring macroeconomic balance while cushioning the impact on the country’s most vulnerable populations.
The Federal Ministry of Finance, Budget and Economic Planning has announced a realignment of the 2025 Federal Budget, with a shift away from fuel subsidies and non-essential recurrent expenditure towards productive sectors. Key measures include:
₦1.1 trillion earmarked for agriculture, with an emphasis on improving rural road networks, subsidised fertiliser distribution, and post-harvest storage infrastructure. ₦540 billion allocated to energy transition, particularly solar mini-grids in underserved northern states. ₦370 billion for school feeding, health insurance coverage expansion and digital public services to mitigate social inequality.
Minister Wale Edun confirmed that the government seeks to reduce fiscal deficits to 3.8% of GDP by the end of 2025, in line with convergence targets set by ECOWAS.
To enhance inter-agency coordination, President Tinubu recently inaugurated the National Inflation Management Committee, comprising representatives from: The Central Bank of Nigeria (CBN) National Bureau of Statistics (NBS) Federal Ministries of Finance, Agriculture, Trade, and Labour Nigeria Governors’ Forum
This committee is tasked with monthly reviews of inflationary trends, proposing immediate and medium-term interventions—ranging from import duty reviews on food staples to state-level logistics incentives.
The government plans to relaunch the Conditional Cash Transfer (CCT) programme, with digital payment mechanisms powered by the Nigeria Inter-Bank Settlement System (NIBSS) and supported by the World Bank.
The programme targets 15 million low-income households with monthly stipends of ₦15,000 (approximately US$10), with pilot disbursements expected to begin in June 2025 in Kaduna, Enugu, and Akwa Ibom.
Additionally, the National Social Investment Programme (NSIP) is being audited and restructured to improve transparency and efficiency, with over ₦300 billion in unaccounted funds from 2023 now under investigation by the EFCC.
While interest rates remain high to combat inflation, the CBN is deploying targeted credit windows to avoid choking growth: ₦200 billion has been released under the Anchor Borrowers’ Programme to support dry-season cultivation. New guidelines under the SME Credit Guarantee Scheme offer 50% risk sharing on loans up to ₦10 million disbursed by participating banks. A forthcoming FX Stabilisation Framework aims to merge official and parallel markets more efficiently, with improved diaspora remittance flows via regulated channels.
Nigeria is currently negotiating a US$1.9 billion budget support facility from the African Development Bank (AfDB) and the Islamic Development Bank (IsDB), conditional on continued reforms in public finance management, procurement, and debt sustainability.
A Technical Assistance Framework is also being finalised with the IMF for non-loan-based support in macro-fiscal modelling and inflation forecasting tools.
In a national broadcast in late April, President Tinubu reiterated his administration’s commitment to a “responsible market economy with a human face,” acknowledging public frustration while appealing for patience.
“We are stabilising the economy not just for investors, but for the traders in Balogun Market, the teachers in Sokoto, and the mothers in Maiduguri. No reform is easy, but no reform is permanent without results,” Tinubu said.
The government has also launched the “Rebuild Nigeria, Restore Hope” campaign across radio, social media and community town halls, aiming to build public trust and clarify reform benefits.
The second quarter of 2025 will be critical in determining the sustainability of Nigeria’s disinflation path. If current policies succeed, headline inflation could fall below 22% by end-June, while GDP growth could surpass the projected 3.6% annual average for 2025.
However, this is contingent on: Maintaining foreign exchange stability through robust oil revenues and remittance flows. Ensuring food supply chains remain uninterrupted by insecurity. Containing fiscal pressures from minimum wage negotiations and debt servicing (currently at ₦8.25 trillion, or 45% of 2025 revenue projections).
Nigeria’s economic managers face a difficult balancing act, but April’s inflation data, combined with focused policy action, suggests a pivot towards gradual macroeconomic recovery is underway—though the path remains narrow and uphill.
Nigeria finds itself at a historic inflection point—caught between the pains of structural reforms and the promise of long-term stability. The modest drop in inflation in April 2025 offers more than just statistical relief; it represents the first tangible outcome of the Tinubu administration’s high-stakes gamble to restructure Africa’s largest economy by population.
But the gains remain fragile, and the transition complex.
President Tinubu’s reforms, particularly the removal of fuel subsidies and liberalisation of the foreign exchange market, have won praise from international creditors and markets, yet they have exacerbated short-term inequality. Millions of Nigerians have watched as transport costs doubled and staple food prices soared, even as government officials celebrated reforms.
The urban poor and rural subsistence farmers, who make up over 60% of Nigeria’s workforce, have borne the brunt of these changes. Without effective social protection and affordable credit, many are still operating at survival level, with minimal resilience to further shocks.
A nationwide survey by the Nigerian Economic Summit Group (NESG) in April showed that 72% of householdsreported skipping meals due to inflation, while 28% of SMEs said they were considering downsizing due to high input costs and weak demand.
The political cost of reform is rising, particularly ahead of state elections in Kogi, Bayelsa, and Edo. Protests over rising living costs have already been reported in urban areas like Ibadan, Kano, and Port Harcourt.
Meanwhile, labour unions have issued a nationwide strike warning unless the minimum wage bill is passed before July. Analysts caution that failure to manage this growing pressure could weaken investor confidence and reverse recent economic gains.
Tinubu’s political capital, earned after decades in opposition and leadership in Lagos—is now being tested nationally. The reform agenda will only succeed if citizens begin to see material benefits, not just macroeconomic improvements.
Nigeria’s outlook is also tied to global trends beyond its control: A sudden drop in global oil prices—currently hovering at $82 per barrel—could undermine fiscal stability, given oil still accounts for over 78% of foreign exchange earnings. Rising geopolitical tensions in the Red Sea and Gulf of Guinea could disrupt Nigeria’s import routes, affecting food, pharmaceuticals, and manufacturing inputs. Climate change continues to disrupt Nigeria’s agricultural cycle. Floods in Niger State in early May wiped out over 6,000 hectares of farmland, threatening Q2 food supply in the north-central region.
At the same time, the country’s energy and digital transformation plans—backed by Afreximbank, AfDB, and the BRICS-led New Development Bank—require political stability and inflation predictability to remain viable.
Nigeria is in the early stages of a long-overdue economic reset—reminiscent of India’s liberalisation in the 1990s or Indonesia’s fiscal overhaul in the 2000s. However, such transformations only succeed when policy credibility is matched by institutional capacity and public trust.
To secure lasting results, Nigeria must: Strengthen public communication of reform outcomes; Ensure the decentralisation of growth through state-level empowerment; Deepen partnerships with local businesses, youth entrepreneurs and women-led SMEs; Invest in data-driven policymaking, including real-time inflation monitoring and productivity metrics.
April’s easing of inflation is not a turning point in itself, but it could mark the beginning of a new trajectory, if managed with care, humility, and inclusive vision. For now, Nigeria is walking a tightrope between recovery and regression, between economic resilience and public disillusionment.
What happens in the next three months will be decisive, not just for Nigeria, but for West Africa’s economic and political stability, as the region watches closely how Africa’s largest democracy handles reform under pressure.
Written by: AfricaHeadline Business Desk – Abuja & Lagos
Edited by: Mariam Olayemi & Carlos D. Mpoko
