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📊 Overview of the June 2025 Inflation Report
According to the National Bureau of Statistics (NBS), Nigeria's Consumer Price Index (CPI) rose by 1.68% month-on-month in June 2025, slightly up from 1.53% in May. While the headline inflation fell from 22.97% in May to 22.22%, food inflation rose from 21.14% to 21.97%. This reflects a complex economic dynamic where overall inflation appears to ease, yet essential commodities remain costly.
📉 Why Headline Inflation Is Falling
Monetary tightening by the CBN: The Central Bank of Nigeria has aggressively raised interest rates, which reduces the money supply and slows down price increases.
Base effect: Inflation is measured year-on-year. Since prices were extremely high in the same period last year, even small increases now appear as a lower rate of inflation.
Forex recovery and fuel moderation: Stabilisation of the Naira and slightly reduced fuel prices have helped moderate costs in some sectors.
Although the figures show improvement, many Nigerians are yet to feel the impact in their daily lives.
🍚 But Why Are Food Prices Still Rising?
Insecurity in farming areas: Ongoing conflict and banditry in key agricultural zones have driven farmers away from their lands, reducing food output.
High transportation costs: Diesel and petrol price increases continue to affect the movement of goods, especially food, from rural farms to urban markets.
Depreciating naira: Imported agricultural inputs such as fertiliser, pesticides, and machinery now cost more, making local farming more expensive.
Poor storage facilities: Nigeria loses a significant portion of its harvests due to a lack of cold storage and poor logistics. These losses drive up prices.
💡 What This Means for Nigerians
Households: Many families have had to reduce their meal portions or shift to less nutritious alternatives, risking long-term health impacts.
Businesses: SMEs face reduced consumer spending power and rising operational costs, pushing many to cut staff or shut down entirely.
Policy dilemma: The CBN is walking a tightrope and raising interest rates curbs inflation but also slows economic growth and limits credit access for businesses.
🔍 What to Watch in Coming Months
Monetary policy: Will the CBN hold or adjust interest rates based on inflation behaviour and economic activity?
Harvest season: A good harvest could ease food inflation slightly, but security and logistics remain critical factors.
Government policy: Any moves on subsidy reinstatement, import tariffs, or agriculture investments could quickly shift inflation trends.
Naira performance: Exchange rate volatility remains a major risk to inflation control.
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