Nigeria’s Inflation Slows to 20.12% in August: A Rare Breather in Consumers’ Long Battle with Rising Prices

For millions of Nigerians grappling with the rising cost of living, August brought a rare glimmer of relief. According to the National Bureau of Statistics (NBS), headline inflation eased to 20.12% year-on-year, marking a 176 basis point decline from 21.88% in July. This cooling trend, though modest, stands out as a significant development in a year dominated by painful inflationary pressures.

A Look Back: The Inflation Spiral

Over the past two years, Nigeria has witnessed a relentless surge in inflation, fueled by multiple shocks, from supply chain disruptions and foreign exchange volatility to subsidy removals and global commodity price swings. By mid-2023, headline inflation was climbing steadily above 22%, leaving households struggling to cope with escalating food, transport, and energy costs.

In that period, food inflation became the fiercest driver of hardship. Staple goods such as rice, maize, and millet doubled in price across markets, putting immense pressure on household budgets and sparking widespread concern about food insecurity. The NBS data for August, therefore, is particularly significant, as it shows food inflation easing to 21.87% y/y from 22.74% in July, with a sharper month-on-month slowdown from 3.12% to 1.65%.

This relief was largely driven by price drops in staples like imported and local rice, guinea corn, maize flour, millet, semolina, and soya milk. These declines, though limited, helped to ease food market volatility that had kept families on edge for months.

The Core Inflation Story

Core inflation, which strips out volatile items such as farm produce and energy, presents a more nuanced picture. On a year-on-year basis, it dropped to 20.33% in August from 21.33% in July, suggesting some easing of structural pressures. Yet on a month-on-month basis, the story was less comforting: the core index rose to 1.43%, up from 0.97% in July.

This increase reflects persistent structural challenges, high transport costs due to fuel pricing, elevated import bills linked to naira volatility, and lingering production constraints across industries. In essence, while food markets offered a reprieve, the underlying cost of doing business in Nigeria remains high.

Expert Insight: Reflection of Fragile Stability

Commenting on the development, Celestine Ukpong, an economist and investor-savvy analyst based in Lagos, said the latest inflation figures are a reflection of both seasonal market adjustments and the government’s attempts to stabilize supply chains.

“What we are seeing here is not necessarily a permanent shift but a fragile stability,” Ukpong explained. “The decline in food inflation is linked to harvest effects and a slight easing in logistics bottlenecks. However, the uptick in core inflation month-on-month shows that structural problems remain, from energy costs to import dependency. Without addressing these fundamentals, inflationary pressures may resurface quickly.”

What It Means for Nigerians

For ordinary Nigerians, the slowdown is welcome but far from transformative. Inflation at 20.12% is still punishing, eroding disposable incomes and limiting consumer spending power. Many households continue to make difficult choices: cutting back on protein-rich foods, reducing healthcare spending, or postponing education-related expenses.

For businesses, particularly small and medium-sized enterprises (SMEs), the marginal relief may ease input costs, but uncertainty remains. Volatile core inflation signals that operational expenses, especially for firms dependent on imports or energy, remain a serious challenge.

Policy Reflections and the Road Ahead

For policymakers at the Central Bank of Nigeria (CBN) and the Ministry of Finance, the August numbers offer cautious optimism. The decline could be partly attributed to seasonal harvests, targeted interventions in food supply chains, and ongoing monetary tightening aimed at reducing excess liquidity.

However, sustaining this trend will not be easy. Rising core inflation on a monthly basis is a red flag that price pressures are still entrenched. The government faces the delicate task of balancing inflation control with growth-supportive policies, especially as businesses and households demand relief measures.

As Nigeria’s economy edges toward structural reforms, analysts warn that inflation will remain a central theme. The challenge is not just about temporary relief but building long-term resilience in food systems, energy supply, and foreign exchange stability.

A Breather, Not a Breakthrough

The August slowdown in inflation is, in many ways, a breather in a long marathon rather than a decisive breakthrough. It highlights both the gains and limitations of current policy responses. For now, consumers may find temporary respite at the market stalls, but the journey toward sustainable price stability remains ongoing.

As Celestine Ukpong rightly notes, the latest figures reflect a fragile stability, one that must be carefully nurtured if Nigeria is to avoid slipping back into deeper inflationary waters in the months ahead.