Published: June 19, 2025
By:Jonathan
Nigeria’s economy is showing early signs of stabilizing—thanks to a combination of policy moves, recalibrated inflation metrics, and a more favorable exchange market. But behind the numbers, the lived experience of Nigerians tells a more complex story.
Let’s break it down.
Inflation is Cooling—At Least on Paper
For the second month in a row, Nigeria’s inflation rate has taken a dip. According to the National Bureau of Statistics (NBS), headline inflation dropped to 22.97% in May 2025, down from 23.71% in April.
While this might sound like good news, experts warn that the drop is partly due to a rebasing of the Consumer Price Index (CPI)—which adjusted the basket of goods used to calculate inflation.
Food inflation, a major driver of hardship, also cooled slightly to 21.14%, giving a flicker of hope to households struggling with rising prices of essentials like garri, rice, and palm oil.
What the CBN is Doing and Not Doing
The Central Bank of Nigeria (CBN), after months of aggressive interest rate hikes, has chosen to pause rate increases for the second time in 2025. This suggests that policymakers are now testing whether previous hikes are finally taming inflation.
Additionally, the naira has shown modest strength, trading around ₦1,586 to the US dollar, compared to over ₦1,600 in previous weeks. This recovery is credited to increased foreign exchange liquidity and the CBN’s market interventions.
Stock Market Rebounds, Investors Take Interest
Nigeria’s stock market has responded positively to the shifting economic winds:
The All-Share Index jumped by 0.46%, reflecting improved investor confidence.
Stocks like Transcorp, Chellarams, Oando, and Beta Glass led the charge with significant gains.
The Nigerian Exchange (NGX) also reported that equity transactions hit ₦2.7 trillion in just four months—marking a new all-time record.
This bounce-back could be a sign that investors are feeling slightly more optimistic about the economy’s trajectory.
Still a Long Road Ahead for Everyday Nigerians
While government figures show signs of improvement, many Nigerians say the change hasn’t reached their pockets.
Market vendors still cite rising prices for staples.
Transport costs remain high due to fuel and logistics issues.
Core inflation (excluding volatile items like food and energy) is still above 22%, showing deeper cost-of-living issues.
The Organized Private Sector (OPS) also questioned the validity of official inflation data, saying it doesn’t always reflect real-world conditions on the ground.
What to Watch Going Forward
Nigeria’s economic outlook is delicately balanced. Here’s what to keep an eye on:
Future Inflation Reports – Will the downward trend continue, or was it just a statistical illusion?
CBN Rate Decisions – Will interest rates remain steady, or spike again if inflation rebounds?
Naira Performance – Will it remain stable, or collapse under pressure from foreign debt and import demand?
Food Security & Subsidies – Will the government intervene in rising food costs or let market forces prevail?
Conclusion
There’s no denying that some key economic indicators are flashing green. Inflation is cooling, investor activity is up, and the naira has found temporary footing. But until food, rent, and transport costs stabilize for the average family, talk of “recovery” remains largely academic.
Nigeria may be turning a corner—but it’s a slow and bumpy one.
