Inflation at 16.05 Percent: A Macro Win but a Micro Struggle for Businesses and Families

The headline inflation rate of Nigeria slowed to 16.05 percent in October 2025 from 18.02 percent the previous month, according to the latest Consumer Price Index from the National Bureau of Statistics. This is the lowest rate of inflation in more than three years and indicates a sustained deceleration of price increases across the key sectors of the economy.

Yet, despite the positive trend in government data, many Nigerians argue that relief has not arrived at their homes or places of business. For the families and businesses struggling with increased costs, it has been a largely statistical victory.

The year-on-year inflation rate fell sharply by 17.82 percentage points from the 33.88 percent recorded in October 2024. The decrease is partly linked to Nigeria’s adoption of a new base year for the Consumer Price Index, which changes how inflation is calculated. Despite the year-over-year decline, month-over-month inflation accelerated to 0.93% in October from 0.72% in September, which indicates that prices are still rising at the household level, reflecting immediate market pressures.

Inflation in food items also dropped to around 13.12 percent year on year. While this reflects real improvement in certain staples, analysts caution that the new base year reduces the appearance of price increases even when market costs remain high.

But the Organised Private Sector is unanimous that although the easing of inflation is quite encouraging, the actual impact on the citizenry is minimal. Dr Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, described the disinflation as an important gain for macroeconomic stability. He noted, however, that households continue to battle structural challenges such as high food prices, rising transport costs, persistent energy problems and difficulties in accessing essential services.

He emphasized that genuine relief can only come through deliberate and sustained reforms that address production bottlenecks, strengthen supply chains, and improve service delivery.

The Association of Small Business Owners of Nigeria also made similar comments. Business environments remain extremely harsh with many small enterprises still shutting down because energy costs, transport expenses and raw material prices remain overwhelming, the group said.

The Nigerian Association of Small and Medium Enterprises also questioned the usefulness of the inflation figures, stating that the cost of everyday household items has not dropped in any meaningful way. In effect, customer purchasing power keeps falling, while sales remain weak.

Some economists are of the opinion that the sharp fall in headline inflation is because of the statistical adjustment to the base year of the consumer price index instead of real improvement in market conditions.

Professor Femi Saibu of the University of Lagos argued that though the inflation rate could be seen to be falling, the prices Nigerians pay at the market remain the same. He explained that the new methodology lowers the figure of inflation without removing the financial burden on households. He said that what drives Nigeria’s inflation pattern now is reduced demand: many citizens cannot afford to buy as much as they used to, reflecting an economy that appears stable while buyers and sellers continue to struggle.

He said that the economy was stable at an uncomfortable point, people weren’t buying, producers aren’t selling, and both sides of the marketplace are under pressure.

Market assessments reveal a mixed situation. Some items such as garri and certain grains have recorded slight reductions, but many essential goods remain costly. Transport costs have not eased. Electricity and generator fuel expenses remain heavy. Rent continues to rise in major cities. Core inflation, which excludes food and energy, currently stays above 18 percent. It confirms that the prices of basic services such as housing, healthcare and education keep on rising. Business owners complain of dwindling customer traffic, as most Nigerians have scaled down their priorities to purchase only the essentials. Goods remain longer on shelves, and profit margins continue to shrink.

According to experts, sustainable progress requires firm action across key areas. Food production and distribution needs to be enhanced; energy and logistics costs reduced; transport networks modernized; and strong coordination between fiscal and monetary authorities maintained.

There is also a growing call for targeted support programs for low-income households and small businesses who continue to bear the worst of rising living costs.

Nigeria’s reduction of inflation to 16.05 percent is a milestone and an encouraging signal for macroeconomic stability. However, in the case of families and businesses suffering under economic pressure each day, the easing of inflation has not yet been translated into real relief. For now, the country has recorded a statistical victory. The challenge is converting this progress into visible and meaningful improvements in the cost of living, business stability, and welfare at household levels. Until that happens, the data will remain positive, while the lived experience of many Nigerians will continue to tell a more difficult story.

Nigeria may have scored a statistical victory with inflation easing to 16.05 percent, but the real test lies beyond the numbers. True progress will only be measured when households feel relief, when businesses regain stability and when daily life reflects the optimism painted by official data. And this leaves us with a deeper question: if the figures show improvement but the lived reality still feels heavy, where does the truth of our economy truly reside in the reports we read or in the experiences of the people living through them every day?