Nigeria’s inflation rate continued its downward trend in August, dropping to 20.12% from 21.88% in July, marking the fifth straight month of moderation. The National Bureau of Statistics (NBS) described it as evidence of easing price growth. Yet on the streets, the story feels different: small businesses and households insist that the cost of living remains painfully high, with weak demand and rising survival pressures.
What the Numbers Show
The latest Consumer Price Index (CPI) revealed a 1.76 percentage point fall compared with July and a sharp drop from 32.15% in August 2024. The CPI inched up to 126.8 points from 125.9 in July, while monthly inflation cooled to 0.74% from 1.99%.
Urban inflation declined to 19.75% (year-on-year), sharply lower than 34.58% a year earlier. Rural inflation was slightly higher at 20.28%, compared with 29.95% in August 2024. On a monthly basis, urban inflation stood at 0.49%, while rural inflation rose to 1.38%, underlining the heavier burden faced by rural communities battling insecurity, transport costs, and supply chain disruptions.
Food inflation—the biggest driver of Nigeria’s inflation—slowed to 21.87% year-on-year, down from 37.52% last year. Prices of staples such as rice, guinea corn flour, maize flour, millet, semolina, and soya milk contributed to the decline. However, in northern states plagued by insecurity and logistical hurdles, food remains expensive.
Core inflation, which excludes volatile food and energy prices, registered at 20.33% (year-on-year), down from 27.58% in August 2024. On a monthly basis, it rose to 1.43% from 0.97%, reflecting higher costs for housing, electricity, gas, education, transport, and healthcare.
Across states, the figures varied widely. Ekiti (28.17%) and Kano (27.27%) recorded the highest inflation, while Zamfara (11.82%) had the lowest. Food inflation peaked in Borno (36.67%) and was lowest in Zamfara (3.30%).
SMEs: “Numbers Don’t Match Reality”
For entrepreneurs and small-scale operators, the easing data means little. Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria, argued that official statistics do not reflect the reality of everyday Nigerians.
“Households and businesses aren’t concerned about percentages in the papers. They care about what their money can buy,” he said, urging government to cushion citizens through social safety nets, affordable food supply, and transport support. Without such steps, he warned, the MSME sector—which employs over 80% of Nigerians—faces severe strain.
Eke Ubiji, Director-General of the Nigerian Association of Small and Medium Enterprises, echoed the sentiment. “From the market’s perspective, nothing is falling. ₦50,000 can disappear in one trip to the market without covering all needs,” he lamented. Many SMEs, he added, are scaling back on raw materials and equipment purchases due to weak demand and high operating costs.
Private Sector Calls for Structural Fixes
Organised private sector leaders stressed that disinflation does not equate to cheaper goods. Gabriel Idahosa, President of the Lagos Chamber of Commerce and Industry, clarified: “Inflation easing means the rate of increase is slowing—not that prices are falling. Prices only drop when supply expands significantly.”
Segun Kuti-George, National Vice President of the National Association of Small-Scale Industrialists, emphasized that prices are “sticky.” Once raised, producers rarely reduce them, even when costs decline, unless forced by competition.
For Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, the slowdown signals macroeconomic stability and improved investor sentiment. Still, he stressed the need for targeted measures to cut food costs and curb insecurity.
Analysts: A Mixed Bag
Economic experts also cautioned against early celebration. Charles Sanni, CEO of Cowry Treasurers Limited, noted that the slowdown reflects both macroeconomic stability and shrinking consumer demand. “Reserves have improved, the naira is stronger, and demand is weak—that explains the figures. But prices remain high,” he said.
Olatunde Amolegbe, CEO of Arthur Stevens Asset Management, explained that inflation should be seen in aggregates. “Some items rise, others fall. Pre-harvest, food prices go up; post-harvest, they ease. But they may still be higher than last year.”
Both analysts highlighted structural risks such as power shortages, poor logistics, and import dependency as obstacles to sustained relief.
What’s Next?
The announcement comes ahead of the Central Bank of Nigeria’s Monetary Policy Committee (MPC) meeting on September 22–23. With inflation easing for five straight months, the MPC could gain flexibility. Still, stubborn food and core inflation may force the bank to keep its benchmark interest rate at 27.5%.
Nigeria’s inflation remains among the highest in Africa. While the moderation suggests progress, it has yet to improve living conditions for most citizens. SMEs, which account for 96% of businesses and drive job creation, continue to struggle with elevated costs, low demand, and squeezed profit margins.
For many stakeholders, the message is clear: disinflation is not enough. Real relief requires fixing structural bottlenecks—from insecurity and logistics to energy and production—to deliver sustainable growth.
