The National Bureau of Statistics (NBS) has reported a significant drop in Nigeria's inflation rate for October 2025, providing some economic relief to the Bola Ahmed Tinubu administration and citizens alike. The latest data shows headline inflation declining from 18.02% in September to 16.02% in October, marking the sixth consecutive monthly decrease.
Government's Economic Milestone Under Scrutiny
The Tinubu administration has been quick to highlight this achievement as evidence of macroeconomic stability established during its two-year tenure. This represents a substantial improvement from the 33.88% inflation rate recorded a year ago before the index rebasing. The Central Bank of Nigeria has worked in coordination with other government arms to enhance price stability for better economic functioning.
However, several scholars and economic analysts are questioning whether this statistical improvement translates to tangible benefits for ordinary Nigerians. Some experts suggest the reduction might align suspiciously well with the 15% inflation target set in the 2025 budget, raising concerns about potential methodological manipulation.
The Methodology Debate and Economic Realities
Critics argue that the inflation rate calculation could be influenced by selective commodity inclusion in the NBS basket. While food inflation reportedly moderated to 13.12% in October 2025 from 39.16% in the same period of 2024, many Nigerians continue struggling with basic living costs. The reported price reductions appear limited to specific commodities used in the index computation.
The exchange rate stability has also contributed to the inflation decline, with the naira gaining over N250 against the US dollar on a year-on-year basis. Yet this stability relies heavily on frequent CBN interventions and borrowing, creating concerns about sustainability if these measures are withdrawn.
The Hidden Factor: Weakened Purchasing Power
An often-overlooked factor in the inflation reduction is the severely weakened purchasing power of average Nigerians. Nominal wages have remained stagnant across most economic sectors while real wages have declined significantly since 2023. The higher costs of petroleum products have cascaded through transportation and essential commodity prices, particularly affecting price-inelastic goods.
This economic pressure has led to reduced aggregate demand, forcing many manufacturers to maintain large inventories of unsold products. The education sector exemplifies this struggle, with the Academic Staff Union of Universities battling for wage increases—a scenario repeating across most sectors except financial services and a few others.
While the inflation decline represents positive movement, the government must address fundamental issues including wage stagnation and security challenges that undermine economic prosperity. The true test of this inflationary trend will come when real wages increase and aggregate demand returns to normal levels.
