Nigeria's headline inflation rate has eased to 23.71% in April 2025, down from 24.23% recorded in March, according to the latest data released by the National Bureau of Statistics (NBS).

The marginal decline comes despite persistent pressures from high energy costs, telecommunications tariffs, and the lingering effects of currency depreciation that continue to impact the Nigerian economy.

Food inflation, a critical component of the headline figure, stood at 21.26% for April. Analysts attribute the slight moderation in food prices to improved supply chains and somewhat subdued consumer demand in the face of economic challenges.

Meanwhile, core inflation, which excludes volatile food and energy prices, cooled to 23.39%, reflecting the impact of rising costs in utilities, telecommunications, and other import-dependent sectors of the economy.

"Core inflation is likely to remain the key driver [of inflation], sustained by the pass-through effects of the naira's depreciation on import-dependent goods," said Felicia Awolope, Senior Investment Research Analyst at Meristem. "Conversely, food inflation may continue to moderate, supported by stable supply levels and subdued demand."

While the naira showed greater stability in April compared to the volatility experienced in the first quarter of the year, it remains significantly weaker on a year-on-year basis. This weakness continues to force importers and service providers to adjust their prices upward, particularly in urban centers where import-dependent consumption is higher.

Victor Onyema, Head of Investment Management at Norrenberger, noted that "the absence of a meaningful decline in food prices has also limited any potential relief on the headline number." He added that while energy and transport costs have shown some stability, any renewed naira weakness or external shocks could reignite broader inflationary pressures.

Looking ahead, Awolope suggested that "inflation may follow a broadly moderate path if currency stability holds and global commodity prices ease." However, she cautioned that "imported cost pressures and FX risks remain key concerns" for the Nigerian economy.

Implications for Monetary Policy

The April inflation data will be a crucial factor when the Central Bank of Nigeria's Monetary Policy Committee (MPC) meets on May 19. After implementing a series of interest rate hikes aimed at stabilizing the naira and curbing inflation, analysts now expect the committee to adopt a more measured approach.

"We expect the MPC to hold rates, especially given recent FX and price stability," Awolope predicted. "But with oil prices softening and external inflows under pressure, maintaining investor confidence remains critical."

The slight easing in inflation provides a glimmer of hope for Nigerian consumers who have been grappling with a cost-of-living crisis. However, economic experts caution that sustained improvement will depend on continued currency stability, effective monetary policy implementation, and favorable global economic conditions.