Nigerian Inflation Falls Below 20% for First Time in Three Years

Nigeria’s annual inflation fell to 18% in September, its lowest level in three years, strengthening expectations that the Central Bank of Nigeria (CBN) may deliver another interest-rate cut at its November meeting.

The National Bureau of Statistics said inflation slowed from 20.1% in August, undershooting economists’ median forecast of 19%. Month-on-month, prices rose 0.7%. The decline marks the sixth straight month of disinflation — a trend driven by stable foreign-exchange rates, increased crude oil output, and lower prices of key food staples as the harvest season begins.

Food inflation eased sharply to 16.9% from 21.9%, while core inflation moderated to 19.5% from 20.3%. The naira remained broadly stable through September, helped by higher oil receipts and liquidity improvements in the interbank FX market.

The moderation in prices supports the CBN’s view that inflationary pressures are easing. Last month, the Monetary Policy Committee cut the benchmark rate for the first time in five years, lowering it by 50 basis points to 27%. Governor Olayemi Cardoso said he expects continued disinflation in the coming months, citing “lagged effects of previous rate hikes” and “sustained currency stability.”

Still, short-term risks linger. A late-September oil workers’ strike caused temporary production losses, while operational disruptions at the Dangote refinery led to fuel shortages that may affect October data.

The MPC meets again on November 25, with investors watching for another symbolic cut that could reinforce the administration’s drive to reduce borrowing costs and stimulate growth ahead of 2026 budget discussions.

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