Nigeria’s headline inflation slowed to 20.12% in August from 21.88% in July, marking the fifth consecutive month of deceleration, according to the National Bureau of Statistics.
The decline was driven mainly by easing food and core inflation, with the August figure recording the sharpest monthly drop since February.
Yet millions of Nigerians continue to struggle with persistently high food costs at local markets, creating a puzzling disconnect between official statistics and everyday shopping experiences.
Patrick Edumedia, head of research at Sterling Asset Management Trustees, during a recent Arise TV interview, credited improved food supply from the harvest season and exchange rate stability for the slowdown. “We’re almost at the peak of harvest between September and November, which naturally improves food availability alongside government interventions,” he said.
Why Nigerians Still Feel the Pinch
Despite falling inflation, Nigerians continue to face high prices in markets. “What we are seeing is that even though inflation has come down, prices will still be going up—it’s just the pace that has slowed,” Edumedia explained, highlighting widespread misunderstanding of inflation dynamics.
Food Inflation Remains Sticky
Food inflation eased year-on-year to 21.87% in August from 26.08% in January, but month-on-month data remains stubborn at 1.65%. Edumedia pointed to insecurity, flooding, logistics costs, and market behavior—where sellers resist lowering prices—as persistent structural pressures.
Government and Farmers at Odds
President Bola Tinubu’s declaration of a food emergency has reignited debate on how to lower food costs. While the government focuses on cutting transportation expenses, farmers argue production costs remain too high, exposing a gap between policy goals and agricultural realities.
Monetary Policy Outlook
With U.S. markets anticipating a potential rate cut, questions remain about capital flows into emerging markets like Nigeria.
Yet Edumedia warned that both the Federal Reserve and Nigeria’s Monetary Policy Committee face “very tough” decisions, with Nigeria unlikely to cut rates before early next year.
Nigeria’s Monetary Policy Rate (MPR) stands at 27.5%, now above headline inflation, creating room for positive real returns.
But Edumedia cautioned that “investors look out for the yields in treasury bills and bonds, not just the policy rate on paper.”
Inflation Outlook
The government projects 15% inflation by year-end, but Edumedia sees that target as ambitious. “Maybe we’ll be closing the year at 17–18%, but not necessarily 15%,” he predicted, emphasizing the need for sustained food supply growth, energy price moderation, and exchange rate stability.