Based on data from National Bureau of Statistics (NBS), Nigeria’s headline inflation slipped by 210bps to 18.02% y/y in September (August: 20.12% y/y), primarily driven by a sharp fall in food prices (-500bps to 16.87% y/y vs August: 21.87% y/y) and a slowdown in core (-80bps to 19.53% y/y vs August: 20.33% y/y) inflation. On a monthly basis, headline inflation eased by 2bps to 0.72% m/m (August: 0.74% m/m).
On a month-on-month basis, the food index declined by 1.57% in September (August: +1.65% m/m), signalling a deflationary turn largely driven by a drop in farm produce prices (-0.68% m/m vs August: -0.24% m/m).
The sustained moderation in farm produce inflation reflects higher output given the seasonal impact of the main harvest, which typically gains momentum from mid-September through December. In contrast, imported food inflation accelerated to 3.38% m/m (August: +1.28% m/m), despite the naira’s appreciation during the month.
This counterintuitive uptick likely reflects the influence of rising global freight and insurance costs. Specifically, major shipping lines like CMA CGM and Maersk announced new surcharges on cargoes bound for Nigerian ports in September, scheduled for implementation in October and December, respectively. The anticipation of these higher costs, coupled with existing logistics bottlenecks, likely pushed up import landing expenses, effectively offsetting the currency gains and keeping imported food prices elevated.
At the same time, core inflation (-1bp to 1.42% m/m) slightly moderated, after a modest uptick in August (+46bps to 1.43% m/m), primarily due to a stronger naira and lower logistics costs. Price increases slowed across the clothing and footwear (-153bps to 0.57% m/m), health (-237bps to 1.84% m/m), transport (-169bps to 0.90% m/m), restaurants & accommodation services (-257bps to 0.09% m/m) and miscellaneous goods & services (-303bps to 0.12% m/m) sub-baskets.
Nonetheless, prices rose in the alcoholic beverages & tobacco (+79bps to 0.05% m/m), utilities (+536bps to 1.46% m/m) furnishings, household equipment and maintenance (+358bps to 3.53% m/m), information & communication (+202bps to 0.45% m/m), recreation, sport & culture (+257bps to 1.06% m/m), and education services (+541bps to 2.67% m/m) sub-items.
Headline Inflation May Fall to 16.2% in October
Headline inflation is projected to fall markedly to 16.2% in October, supported by a favourable base effect that accelerates the disinflation trajectory. According to NBS data, the average pump price of PMS stood at NGN1,184.83/litre in October 2024, compared to recent prices that have ranged between NGN1,024.99 and NGN1,037.66/litre from May to August 2025.
Furthermore, on a year-on-year basis, the naira has appreciated by 11.3% to an average of NGN1,463.78/USD in October 2025 from NGN1,629.62/USD in October 2024. With global oil prices easing and the naira appreciating, domestic fuel prices are expected to moderate further.
Although higher global freight and logistics costs have raised import landing expenses, the sustained appreciation of the naira should provide some cushion against the upward pressure on imported food and non-food prices. In addition, the ongoing primary harvest season is expected to keep prices of farm produce lower, sustaining a downtrend in food inflation.
Therefore, we expect a broad-based moderation in both food and core inflation, ultimately driving a significant reduction in headline inflation in October.
Cordros
