Inflation drop: Despite food prices reduction, purchasing power remain low

Mixed reactions yesterday trailed the National Bureau of Statistics (NBS) report which showed that prices of food reduced slightly in September when compared to August 2025 with headline inflation rate dropping to 18.02. Daily Trust reports that NBS in its monthly inflation report said the Food inflation rate in September 2025 was -1.57 percent, down […]

Mixed reactions yesterday trailed the National Bureau of Statistics (NBS) report which showed that prices of food reduced slightly in September when compared to August 2025 with headline inflation rate dropping to 18.02.

Daily Trust reports that NBS in its monthly inflation report said the Food inflation rate in September 2025 was -1.57 percent, down by 3.22 percent compared to August 2025 (1.65 percent).

It attributed the decrease to the drop in the average prices of maize (corn) grains, garri, beans, millet, potatoes, onions, eggs, tomatoes, fresh pepper etc.

 

‘Purchasing power remains low’

But many Nigerians have expressed mixed reactions over the NBS report, saying the report has not reflected on the standards of living of the citizens.

A civil servant in Abuja, Khadija Adam stated that the price of food commodities has reduced but the reduced purchasing power of Nigerians has made it difficult for most people to purchase.

She said a measure of rice that was hitherto sold for N2,500 in her area in Suleja in Niger State, has now dropped to N1,500.

“But still I know people who can’t afford it as their purchasing power has declined over the years. So it is the people that have the money that will enjoy the drop in price of commodities,” he said.

Also, a provision seller at Lugbe, a suburb of Abuja, confirmed the reduction of prices in food commodities.

He said commodities like rice, beans, spaghetti and macaroni have all reduced in prices.

When asked if people are still buying, he said, “Yes people are buying but not at the quantity when prices were running high the last two years. On the price, a bag of 50 kg rice is sold to us ranging from N50,000 to N55,000 while we also sell it at N60,000.”

Kehinde Olufowobi who resides in Ikorodu described the inflation figure as a reflection of the market, saying prices of staple food have reduced.

“The inflation rate in Nigeria witnessed a decline in the month of September, marking a notable improvement in the country’s economic indicators. This development suggests that the government’s efforts toward stabilizing the economy and curbing price increases may be beginning to yield results.

“Interestingly, the effect of this decline in inflation is already visible at the grassroots level. In my area (Ikorodu) in Lagos, the prices of several food items have noticeably decreased. Staples such as rice, beans and garri which had previously surged in price, are now being sold at more affordable rates. This reduction has brought a sense of relief to many households, especially for low- and middle-income earners who have been struggling to cope with the rising cost of living in recent months,” he said.

He expressed optimism for further reduction in the cost of food items, saying that it will improve household welfare.

Speaking with our correspondent, president of the Premium Bakers’ Association of Nigeria (PBAN), Engr. Emmanuel Onuorah said the reduced prices are not reflecting in people’s pockets.

He said, “Suddenly inflation dropped by three per cent but it should reflect in people’s pockets.  For us some materials are still going up though our baking ingredients are stable and that is why premium bread makers have not increased prices of bread in the last one year.

“Questions should be asked, we must ask NBS how this inflation is coming down and there is no trickle-down effect. It is like the data is for the uptick. For all I know if inflation is coming down in the western world, maybe UK, America, Australia, Canada or even China, people feel it in their pockets. When people are not feeling inflation in their pockets, I don’t know how you would explain it.”  

 

What the NBS is saying

It added that the average annual rate of Food inflation for the twelve months ending September 2025 over the previous twelve-month average was 24.06 percent, which was 13.47 percent points lower compared with the average annual rate of change recorded in September 2024 (37.53 percent).

“The food inflation rate in September 2025 was 16.87 percent on a year-on-year basis. This was 20.9 percent lower compared to the rate recorded in September 2024 (37.77 percent). The significant decline in the annual food inflation figure is technically due to the change in the base year.”

It added that headline inflation rate eased to18.02 per cent relative to the August 2025 headline inflation rate of 20.12 per cent.

“Looking at the movement, the September 2025 headline inflation rate showed a decrease of 2.1 percent compared to the August 2025 headline inflation rate. In addition, on a year-on-year basis, the headline inflation rate was 14.68 percent lower than the rate recorded in September 2024 (32.70 percent).”

“This shows that the headline inflation rate (year-on-year basis) decreased in September 2025 compared to the same month in the preceding year (i.e., September 2024), though with a different base year, November 2009 = 100. However, on a month-on-month basis, the headline inflation rate in September 2025 was 0.72 percent, which was 0.02 percent lower than the rate recorded in August 2025 (0.74 percent). This means that in September 2025, the rate of increase in the average price level was lower than the rate of increase in the average price level in August 2025.”

 

Inflation highest in Adamawa, Katsina

The report noted All Items inflation rate on a Year-on-Year basis was highest in Adamawa (23.69 percent), Katsina (23.53 percent), and Nasarawa (22.29 percent), while Anambra (9.28 percent), Niger (11.79 percent) and Bauchi (12.36 percent) recorded the lowest rise in Headline inflation on a Year-on-Year basis.

But on a month-on-month basis, the highest increase was in Zamfara (9.36 percent), Adamawa (8.15 percent) and Nasarawa (7.49 percent), while Niger (-8.14 percent), Oyo (-5.56 percent), and Bayelsa (-4.61 percent) recorded declined.

It went on to state that food inflation when compared yearly was highest in Ekiti (28.68 percent), Rivers (24.18 percent), Nasarawa (22.74 percent), while Bauchi (2.81 percent), Niger (8.38 percent), and Anambra (8.41 percent) recorded the slowest rise.

“On a month-on-month basis, however, food inflation was highest in Zamfara (15.62 percent), Ekiti (12.77 percent), Sokoto (12.55 percent), while Akwa Ibom (-12.97 percent), Borno (-12.95 percent), and Cross River (-10.36 percent) recorded decline in Food inflation on Month-on-Month basis.

 

Uwaleke links drop to appreciation of Naira

Speaking with Daily Trust, a professor of capital market, Prof. Uche Uwaleke, said the drop which is caused by decline in food price was mostly fuelled by the appreciation of the Naira.

Uwaleke said: “One can also see the positive passthrough effect of naira appreciation in September on the core inflation which excludes the prices of volatile items such as food and energy. Core inflation rate is now under 20 percent.”

He however said at 18.02 percent, inflation rate is still far from the CBN long-run target of 9 percent.

“The challenge before the government and the monetary authority is to ensure that this disinflation is sustained and that some of the downside risks to inflation including elevated spending as we approach the elections season are mitigated in good time.”

“Also, it would appear that much of the increase in the food output which pushed down food prices occurred in the Southern States of Akwa Ibom, Cross River, and Anambra which recorded low food inflation rates.”

 

Inflation level remains high, eroding purchasing power – Muda

On his part, the Director/Chief Executive Office, Centre for the Promotion of Private Enterprise [CPPE], Dr Muda Yusuf, said the disinflation trajectory is commendable but inflation levels remain high and continue to erode household purchasing power, undermine consumer confidence, and weaken real incomes.

He said the gains achieved so far must therefore be consolidated through decisive and well-targeted policy actions.

 

He added that the current disinflation has been shaped by a combination of structural and macroeconomic factors, including; increased food supply during the harvest season has moderated food prices, rebasing of inflation methodology earlier in the year that led to significant reduction in inflation figures, naira’s stability and “mild appreciation in some months helping to moderate imported inflation.”

 

“Tighter monetary policy, reduced fiscal leakages, and better coordination between fiscal and monetary authorities have contributed to easing inflationary pressures. These factors collectively explain the progress made on price moderation, though the underlying structural issues that drive cost-push inflation remain significant.”

 

He added that despite the moderation, inflation remains high in key consumption and production sectors with persistent insecurity in farming areas, high transport costs, and climate-related disruptions continue to constrain food output.

 

“There is High fuel prices, poor road networks, and multiple levies across states inflate distribution costs. Unreliable electricity supply and high energy costs raise the cost of production across sectors. And continued escalation in these essential services sustains upward pressure on living costs.

 

He went on to urge the federal government to strengthen security in farming regions to facilitate production and market access.

 

“The sustained disinflation trend is a welcome development and a sign of improving macroeconomic fundamentals. However, the cost-of-living crisis remains acute, particularly for low- and middle-income households. The next phase of reform must therefore prioritize welfare-focused and cost-reduction measures that deliver tangible relief to citizens.”

 

“Business confidence is rising, but consumer confidence remains fragile. Policies that enhance productivity, stabilize prices, and reduce the structural cost of doing business will not only strengthen the disinflation trajectory but also foster inclusive and sustainable economic recovery. With consistency, coordination, and structural reforms, Nigeria can achieve a stable single-digit inflation rate over the medium term — anchoring growth, improving welfare, and restoring confidence in the economy.”