CPPE: Sustained Deceleration of Inflation Rate Suggests Gradual Regaining of Macroeconomic Stability

Dike Onwuamaeze

The Centre for the Promotion of Private Enterprise CPPE has described the continued deceleration of inflationary rate as a suggestion that Nigeria is gradually regaining macroeconomic stability.

This was stated by the Chief Executive Officer of CPPE Dr. Muda Yusuf, in the CPPE’s policy brief on August inflation titled “Nigeria’s Inflation Shows Continued Deceleration in August 2025.”

Yusuf said: “Nigeria’s headline inflation continued its downward trajectory for the fifth consecutive month in 2025, signalling a steady return to price stability.

“The inflation rate eased to 20.12 per cent, down from 21.88 per cent in July — a notable 1.76 percentage point decline.

“This sustained moderation suggests that Nigeria is gradually regaining macroeconomic stability.”

He pointed out that month-on-month inflation also slowed sharply, with prices rising by just 0.74 per cent in August compared with 1.99 per cent in July — one of the lowest sequential increases in over a year.

He identified food and alcoholic beverages, restaurants and accommodation services, transport and energy costs as the main contributors to inflation in August.

However, food inflation moderated to 21.87 per cent from 22.74 per cent in July, while core inflation (excluding food and energy) declined to 20.33 per cent from 21.33 per cent, indicating broad-based easing in price pressures.

Yusuf, however, noted that consumer confidence has remained fragile due to persistently high food prices and weak purchasing power.

He said: “Encouragingly, consumer pessimism is gradually easing, suggesting that households are beginning to adjust expectations as inflation slows.”

According to him, several factors were responsible for l the continued deceleration in inflation.

They include base effects from the unusually high inflation rates recorded in 2024; stabilization of the foreign exchange market, which has reduced imported inflation and improved business confidence and improved agricultural production from sub-national government interventions, helping boost food supply and contain price spikes.

 He, therefore, advised government to consolidate and build on these gains a coherent mix of fiscal, monetary, and structural reforms.

Yusuf told government to “continue stabilising the exchange rate and deepen fiscal consolidation to curb deficits and manage public debt prudently,” and to “collaborate with state governments to remove productivity constraints.”

He recommended investment in infrastructure, logistics and security to improve output and reduce costs. According to him, government should moderate money supply growth through tighter monetary-fiscal coordination, and align fiscal, tax, and trade policies to reduce production and operating costs across sectors