Nigeria’s headline inflation rate continued its downward trajectory, falling to 16.05% in October 2025, the lowest level since March 2022, according to data released by the National Bureau of Statistics (NBS). This marks the seventh consecutive month of decline, signaling a potential turning point in the country’s fight against soaring prices that peaked above 30% last year. The moderation comes amid sweeping economic reforms under President Bola Tinubu’s administration, which have stabilized the naira and bolstered foreign reserves, drawing renewed investor interest.
The NBS report, published on November 17, highlighted broad-based easing across key categories. Food inflation, a major driver of overall prices, dropped sharply to 13.12% from 16.87% in September, thanks to a robust harvest season and improved agricultural output. Core inflation, which excludes volatile food and energy items, also moderated to 18.69%, its lowest since February 2023. On a month-on-month basis, the consumer price index (CPI) rose by 0.93%, a slight uptick from September’s 0.72%, but experts say this does not derail the overall disinflationary trend.
The decline is attributed to a mix of policy measures and seasonal factors. Central Bank of Nigeria (CBN) Governor Olayemi Cardoso has credited reforms such as the unification of foreign exchange markets, clearance of FX backlogs, and tighter monetary policy for reducing imported inflation and enhancing liquidity. Additionally, the NBS recently rebased the CPI to a November 2009 benchmark, providing a more accurate reflection of current economic realities.
In a bid to sustain these gains, the CBN’s Monetary Policy Committee (MPC) voted to retain the benchmark Monetary Policy Rate (MPR) at 27% during its November 24-25 meeting, the last of the year. The committee also maintained the asymmetric corridor at +50/-450 basis points around the MPR, kept the Cash Reserve Ratio (CRR) at 45% for commercial banks and 16% for merchant banks, and held the Liquidity Ratio at 30%. “This decision reflects our resolve to allow room for a clearer assessment of near-term economic conditions,” Cardoso said in a statement following the meeting.
Analysts had speculated on a potential rate cut after September’s 50-basis-point reduction—the first in five years, but the MPC opted for caution amid lingering structural challenges like high energy costs, logistics bottlenecks, and insecurity in food-producing regions. Despite the hold, the policy stance has contributed to a surge in foreign reserves to $46.7 billion, the highest since 2019, and resumed portfolio inflows.
Investor confidence is on the rise, evidenced by recent credit rating upgrades. S&P revised Nigeria’s outlook to “positive” earlier this month, citing stronger growth prospects and reform momentum, while Moody’s and Fitch have also issued upgrades. The government successfully raised $2.35 billion through Eurobonds to support the 2025 budget, underscoring improved access to international markets.
Under Governor Olayemi Cardoso, the CBN has rolled out a reform arsenal since mid-2023, tackling everything from currency woes to fiscal leaks. Think of it as a financial reboot: unifying the foreign exchange (FX) markets to end the black-market chaos, clearing a staggering $7 billion in backlogs owed to airlines and investors, and revamping remittance rules for faster inflows. The impact? A stabilized naira that’s curbed imported inflation, making everyday goods like imported rice or fuel less of a wallet-drainer.
Then there’s the monetary muscle: Hiking the Monetary Policy Rate (MPR) to a peak before a cautious 50-basis-point cut in September, the first in five years, and holding it steady at 27% in November’s MPC meeting. This tight policy has reined in excess money supply, cooling demand-driven price spikes. The ripple effects are real: Foreign reserves have ballooned to $46.7 billion, the highest since 2019, giving the CBN firepower to defend the currency and attract hot money. Investors are taking notice, credit agencies like S&P upgraded Nigeria’s outlook to “positive,” Moody’s to B3, and Fitch followed suit, praising the reform momentum. Nigeria even raised $2.35 billion in Eurobonds, a vote of confidence that funds the 2025 budget without printing money.
But it’s not all macro jargon, these changes hit home. Food inflation, which plagues millions, plunged to 13.12% thanks to better harvests and reduced import costs. Core inflation eased to 18.69%, and overall, the economy’s projected to grow 3.5% on average through 2026. Sure, challenges linger: High energy costs and insecurity still bite, and high rates can squeeze businesses. Yet, as Cardoso put it post-MPC, this pause allows “a clearer assessment of near-term conditions,” setting the stage for more cuts if trends hold. In short, CBN’s reforms have flipped the script from crisis to credibility, boosting reserves, ratings, and real purchasing power.
Now, let’s zoom out to West Africa’s other heavyweight: Ghana. Both nations have battled inflation beasts, but Ghana is taming its own faster, offering Nigeria a roadmap, and a bit of friendly rivalry. Ghana’s inflation? It nosedived to 8% in October 2025, down from 9.4% in September and a whopping drop from over 50% peaks in 2022-2023. That’s single digits for the first time in four years, signaling a swifter rebound.
What’s Ghana’s secret sauce? Similar reforms, but with an IMF twist: A $3 billion bailout in 2023 kickstarted debt restructuring, fiscal tightening, and monetary hikes that peaked at 30% before cuts began. By November 2025, the Bank of Ghana is eyeing more rate reductions as inflation cools quicker than expected, buoyed by stable cocoa exports and prudent budgeting. Investor confidence? Skyrocketing, Finance Minister Cassiel Ato Forson boasts of a “rebound from the worst crisis in a generation,” with growth poised for 2026 surges. Analysts like PwC’s Vish Ashiagbor hail the 8% rate as a “milestone” restoring stability.
Compare that to Nigeria: While both ditched subsidies (fuel in Nigeria, similar fiscal drains in Ghana) and unified FX markets, Ghana’s smaller economy and IMF lifeline accelerated its disinflation, hitting 8% while Nigeria lingers at 16%. Yet Nigeria’s oil-driven scale gives it an edge in reserves ($46.7B vs. Ghana’s ~$6-8B), and its reforms have drawn bigger Eurobond hauls. The lesson? Consistency pays off, Ghana’s ahead in price stability, but Nigeria’s broader reforms could unleash faster growth if structural hurdles like infrastructure are tackled. As one X user quipped, “Ghana’s winning the inflation sprint, but Nigeria’s building for the marathon.”
However, challenges persist. While inflation has eased, it remains among the highest globally, and the benefits have yet to fully trickle down to ordinary Nigerians, where food insecurity affects half the population. Critics argue that high interest rates are stifling business growth, with some calling for more targeted fiscal support.
Looking ahead, economists forecast inflation to dip further to around 14.7% by year-end, potentially paving the way for rate cuts in 2026. The IMF has urged continued tight policy alongside expanded social safety nets to cushion vulnerable households. As Nigeria navigates this recovery, the focus remains on structural reforms to drive sustainable, inclusive growth in Africa’s largest economy.
