Nigeria’s July inflation report signals cautious optimism amid persistent risks – CPPE 

The Centre for the Promotion of Private Enterprise (CPPE) has released its commentary on Nigeria’s July 2025 inflation report, describing the latest figures as a mixed bag of progress and persistent vulnerabilities.

While headline and core inflation showed signs of easing, food prices and monthly inflation trends continue to pose challenges for policymakers.

According to the National Bureau of Statistics (NBS), headline inflation declined for the fourth consecutive month, falling from 22.22% in June to 21.88% in July, a 0.34% deceleration.

Month-on-month food inflation also moderated slightly, easing from 3.25% to 3.12%. Core inflation posted a marginal year-on-year decline of 0.03%, while month-on-month core inflation dropped sharply from 3.46% to 0.97%.

A stabilizing macroeconomic environment 

Dr. Muda Yusuf, Director/CEO of CPPE, attributed the improvements to a stabilizing macroeconomic environment, supported by relative exchange rate calm, improved investor sentiment, and the impact of import duty waivers on essential staples such as rice, maize, and sorghum.

He also noted that the base effect, stemming from elevated inflation levels in 2022, has contributed to the downward trend.

However, Yusuf cautioned against premature celebration. Month-on-month headline inflation rose from 1.68% in June to 1.99% in July, while year-on-year food inflation increased from 21.97% to 22.74%. These figures, he said, reflect the economy’s continued exposure to supply-side shocks and structural inefficiencies.

Policy recommendations 

To consolidate recent gains and address lingering inflationary pressures, CPPE outlined several key policy priorities:

• Foreign Exchange Stability: Sustaining calm in the FX market to anchor inflation expectations.
• Structural Reforms: Tackling high logistics costs, insecurity, climate-related disruptions, and port inefficiencies.
• Fiscal Discipline: Ensuring prudent government spending and managing liquidity injections to avoid stoking inflation.
• Monetary Innovation: Exploring creative liquidity management tools beyond conventional tightening measures, especially as lending rates have surged above 30% for many businesses.

“The July inflation report offers a basis for cautious optimism,” Yusuf stated. “While headline and core inflation have moderated, the persistence of food price pressures and monthly inflation spikes underscores the need for coordinated monetary, fiscal, and structural reforms.” 

What you should know 

The latest NBS report shows that Nigeria’s urban inflation rate stood at 22.01% in July 2025, which was 13.76% points lower compared to the 35.77% recorded in July 2024.

• On a month-on-month basis, the urban inflation rate was 1.86% in July 2025, down by 0.25% compared to June 2025 which was at 2.11 %.
• The corresponding twelve-month average for the urban inflation rate was 27.04% in July 2025. This was 5.85% points lower compared to the 32.89% reported in July 2024.
• On the other hand, the rural inflation rate in July 2025 was 21.08% on a year-on-year basis. This was 10.17% points lower compared to the 31.26% recorded in July 2024.

On a month-on-month basis, the rural inflation rate in July 2025 was 2.30%, up by 1.67% compared to June 2025 which was 0.63%.

The corresponding twelve-month average for the rural inflation rate in July 2025 was 23.84%. This was 5.02% points lower compared to the 28.86% recorded in July 2024.