Stable Naira and Lower Fuel Prices Contribute to Easing Inflation in Nigeria

In February 2025, Nigeria’s inflation rate decreased for the first time to 23.18%, down from 24.48% in January. This decline is attributed to a rebase of the Consumer Price Index, lower fuel costs, and a stable naira. The Dangote Refinery’s increased output contributed to a 33% drop in diesel prices, though petrol prices remained unchanged. Despite these improvements, analysts predict inflation may rise again by April due to global pressures.

Nigeria experienced a notable decrease in inflation for the first time in 2025, with rates falling to 23.18% in February from 24.48% in January, as reported by the National Bureau of Statistics. This decline is attributed to a rebase of the Consumer Price Index (CPI), alongside reduced fuel prices and a stable naira.

The launch of the Dangote Refinery significantly influenced fuel costs, leading to a 33% reduction in diesel prices, although petrol prices remained stable. Additionally, food inflation decreased marginally to 23.51%, compared to January’s 24.08%. Despite this temporary easing, experts caution that inflation could rise again by April due to global economic factors.

In response to these economic developments, Nigeria’s Monetary Policy Committee maintained interest rates at 27.5% during their recent assessment, highlighting a cautious approach amidst fluctuating markets. This decision reflects the need to monitor ongoing economic conditions closely while considering potential inflationary pressures.

Nigeria’s inflation has seen a temporary decrease thanks to stable currency and lower fuel prices, marking 23.18% in February. However, analysts express concerns about potential surges in inflation due to global economic influences. The stability of the naira and the decrease in diesel prices from the Dangote Refinery have played key roles in this context, while the Monetary Policy Committee has chosen to keep interest rates steady at 27.5% as a precaution.

Original Source: iafrica.com