Nigeria’s headline inflation rate fell for the fifth consecutive month in August, easing to 20.12 per cent from 21.88 per cent in July. While the National Bureau of Statistics described the trend as a sign of moderating price growth, small businesses, households, and private sector leaders say the reality on the ground paints a different picture: prices remain stubbornly high, demand is weak, and survival is getting tougher.
According to the NBS Consumer Price Index released on Monday, the inflation slowdown represents a 1.76 percentage point drop month-on-month and a sharp fall from the 32.15 per cent recorded in August 2024. The CPI rose marginally to 126.8 points in August from 125.9 in July, while month-on-month inflation stood at 0.74 per cent, far lower than the 1.99 per cent recorded in July.
Urban inflation eased to 19.75 per cent year-on-year in August from 34.58 per cent a year earlier, while rural inflation was higher at 20.28 per cent compared with 29.95 per cent in August 2024.
On a monthly basis, urban inflation slowed to 0.49 per cent, while rural inflation was 1.38 per cent. Analysts said the figures highlighted the sharper impact of price pressures in rural communities where insecurity, transport costs, and supply chain bottlenecks worsen inflation.
Food inflation, the strongest driver of Nigeria’s inflation basket, also moderated to 21.87 per cent year-on-year from 37.52 per cent in August 2024. Month-on-month, food inflation slowed to 1.65 per cent from 3.12 per cent in July.
The decline was linked to falling prices of staples such as rice, guinea corn flour, maize flour, millet, semolina, and soya milk. However, despite the slowdown, food prices remain elevated, especially in northern states hit by insecurity and logistical challenges.
Core inflation, which excludes volatile agricultural products and energy, was recorded at 20.33 per cent year-on-year in August, down from 27.58 per cent in August 2024. On a monthly basis, however, it rose to 1.43 per cent from 0.97 per cent, reflecting pressure from housing, electricity, gas, transport, education, and healthcare.
Across the states, inflation varied widely. Ekiti posted the highest at 28.17 per cent, followed by Kano at 27.27 per cent. Zamfara recorded the lowest at 11.82 per cent. Food inflation was highest in Borno at 36.67 per cent, while Zamfara was lowest at 3.30 per cent.
Small businesses lament
For many Nigerians, particularly small business owners, the easing inflation numbers have not translated into relief. President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said while falling inflation looks positive on paper, it has little effect on ordinary Nigerians.
“Small businesses and households have little or nothing to do with the macroeconomy. They really do not want to see what is in the papers; they are interested in what they can feel in their livelihood,” he said.
Egbesola urged the government to provide a soft landing through social safety nets, food access, and transport support. He warned that without urgent interventions, the MSME sector—which employs over 80 per cent of the workforce—risks collapse.
Director-General of the Nigerian Association of Small and Medium Enterprises, Eke Ubiji, was more direct. “From the perspective of SMEs, nothing is dropping. What is happening in the market does not correspond with the statistics. One could take ₦50,000 to the market and exhaust it without buying everything,” he lamented.
Ubiji noted that many businesses are cutting back on raw material purchases and equipment investments because of high costs and weak consumer demand.
OPS caution government
Organised Private Sector leaders agreed that while disinflation is welcome, it does not mean prices are falling. President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said high prices will only fall with significant increases in production and reduced post-harvest losses.
“Inflation dropping to 20.12 per cent does not mean that absolute prices of goods are falling. The public tends to misinterpret it. Falling prices, which means deflation, will come only when supply really increases,” Idahosa explained.
National Vice President of the National Association of Small-Scale Industrialists, Segun Kuti-George, added that prices are sticky. “When prices go up, they rarely come down because producers and sellers don’t want them to. Even when costs fall, they prefer to retain high prices unless competition forces a cut,” he said.
Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, described the decline as a sign of macroeconomic improvement and rising investor confidence but stressed that government must target food costs and tackle insecurity.
Experts speak
Economic analysts also cautioned against celebrating too early. Chief Executive of Cowry Treasurers Limited, Charles Sanni, explained that the slowdown reflects not only macro stability but also weak consumer demand.
“It is not just data. Consumer demand has shrunk, foreign reserves have improved, and the naira has been appreciating. These are positives, but prices are still high,” Sanni said. He noted that while naira stability and higher reserves have helped, structural issues like power shortages, high logistics costs, and import dependency remain major risks.
Similarly, CEO of Arthur Stevens Asset Management Limited, Olatunde Amolegbe, said inflation figures must be understood as aggregates. “Some items have gone up, others down. During pre-harvest, food prices rise, and post-harvest, they fall. But they may still be higher than last year,” Amolegbe explained.
He added that month-to-month data suggests moderation, but high year-on-year inflation still reflects the heavy burden on households.
The inflation announcement comes days before the Central Bank of Nigeria’s Monetary Policy Committee meets on September 22–23. While five months of easing inflation could give the MPC flexibility, persistent food and core inflation may compel the bank to maintain its current benchmark interest rate of 27.5 per cent.
The CBN faces a delicate balance: keep interest rates high to curb inflation, or ease to support growth in a sluggish economy.
Despite signs of macroeconomic stability, Nigeria’s inflation remains among the highest in Africa. The moderation offers a glimmer of hope but has not translated into improved welfare for most Nigerians. SMEs, which make up 96 per cent of the business space and drive job creation, continue to face high input costs, weak demand, and declining margins.
Private sector leaders and analysts insist that government must move beyond celebrating disinflation to tackling structural bottlenecks: insecurity, weak infrastructure, poor logistics, and inadequate power supply.
Until then, the gap between statistical improvements and lived realities will persist. For businesses and households, inflation may be slowing, but survival remains an uphill battle.
