Nigeria’s Inflation Rebounds to 24.2% in March as Currency Weakens

BREAKING NEWSApril 16, 2025 at 10:23 AM UTC

TLDR

Nigeria’s headline inflation rose to 24.2% in March, reversing a brief slowdown in February, according to data from the National Bureau of Statistics
The increase was driven by festive demand during Eid al-Fitr, currency depreciation, and elevated logistics costs
The Central Bank of Nigeria’s Monetary Policy Committee will meet in May, and markets expect a potential interest rate hike or liquidity tightening

Nigeria’s headline inflation rose to 24.2% in March, reversing a brief slowdown in February, according to data from the National Bureau of Statistics. The increase was driven by festive demand during Eid al-Fitr, currency depreciation, and elevated logistics costs.

Core inflation—excluding food and energy—stood at 24.43%, while food inflation fell slightly to 21.79% from 22.9% in February, indicating price pressures beyond seasonal food effects. Analysts attributed the uptick to naira volatility, import pass-through, and adjusted utility costs. The naira weakened above ₦1,400/$ in March’s parallel markets, reversing earlier gains following central bank reforms. Importers and manufacturers passed higher input costs onto consumers, compounding pressure in urban areas.

Analysts expect inflation to remain above 20% in the coming months. Meristem projects inflation between 20–24% through mid-2025, though it flagged risks from FX swings and commodity shocks. The Central Bank of Nigeria’s Monetary Policy Committee will meet in May, and markets expect a potential interest rate hike or liquidity tightening to counter inflation and stabilize the currency.

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Key Takeaways

Nigeria’s inflation rate climbed in March as currency depreciation and festive spending outweighed a modest decline in food prices. The naira’s renewed weakness—crossing ₦1,400/$—has heightened import costs across sectors, fueling core inflation even as food inflation cooled slightly. The impact is especially acute in cities where consumers face rising energy, telecom, and transportation costs. Analysts point to continued pressure from global supply chain risks and domestic policy adjustments like planned electricity tariff hikes. While the Central Bank had seen early gains from recent FX reforms, renewed volatility has disrupted short-term stability. Expectations are growing that the Central Bank may resume tightening monetary policy at its next MPC meeting to curb inflation expectations and support the currency. The situation underscores Nigeria’s vulnerability to external shocks and the limits of price control without structural reforms. Inflation may stay elevated without broader fiscal and FX market alignment to stabilize import costs and supply chains.

Nigeria

Inflation

Interest Rate

Economy

Consumer Prices

Naira

Currency Depreciation