Nigeria’s inflation hits 3-year low at 18.02%, CBN hails policy gains

From Uche Usim, Washington DC

Nigeria’s inflation rate dropped to 18.02 per cent in September, marking its lowest level in three years and the sixth consecutive month of decline, according to the National Bureau of Statistics (NBS). Core inflation eased to 19.53 per cent, while food inflation moderated to 16.87 per cent, signalling a broad-based slowdown in price pressures.

The sustained decline represents a dramatic turnaround from the 34.19 per cent peak recorded in June 2024, reflecting the Central Bank of Nigeria’s (CBN) firm monetary policy stance to curb inflation and stabilise the economy.

In response to surging prices last year, the CBN embarked on an aggressive tightening cycle, raising the Monetary Policy Rate (MPR) from 18.75 per cent to 27.50 per cent and increasing the Cash Reserve Ratio (CRR) to 50 per cent for commercial banks and 16 per cent for merchant banks.

However, with inflation showing consistent moderation, the Bank eased slightly in September, cutting the MPR by 50 basis points to 27.00 per cent and reducing the CRR for commercial banks to 45 per cent, while maintaining what it called a “firm anti-inflationary posture”.

The tightening drive was complemented by foreign exchange market reforms, including exchange rate unification and improved transparency, which have stabilised the naira. The spread between official and Bureau de Change (BDC) rates has narrowed to below 2 per cent, boosting investor confidence and reducing imported inflation.

Nigeria’s foreign reserves remain strong at over $43 billion, providing more than 11 months of import cover, bolstered by steady forex inflows and improved market confidence.

Speaking at the IMF–World Bank Annual Meetings, the CBN Governor Olayemi Cardoso said the trend is expected to continue.

“We expect inflation to continue to trend downward in the near term, supported by tight monetary conditions, a stable naira, and increased food supply,” he stated.

The CBN reiterated its commitment to consolidating gains through sustained exchange rate stability, improved agricultural productivity, and the moderation of petroleum product prices, key anchors for Nigeria’s ongoing disinflation path.