… as inflation rate rises to 24.2% in March
- Why March inflation defied analysts’ projections – Experts
Festus Okoromadu
Udeme Bassey
Nigeria’s inflation rate climbed to 24.23% in March, marking the first uptick since the recent rebasing and defying analysts’ expectations of a slowdown.
The latest Consumer Price Index data released on Tuesday by the National Bureau of Statistics shows a notable rise from February’s figure of 23.18%.
“In March 2025, the Headline inflation rate rose to 24.23% relative to the February 2025 headline inflation rate of 23.18%.
“Looking at the movement, the March 2025 headline inflation rate showed an increase of 1.05% compared to the February 2025 Headline inflation rate.
“Furthermore, on a month-on-month basis, the Headline inflation rate in March 2025 was 3.90%, which was 1.85% higher than the rate recorded in February 2025 (2.04%).
“This means that in March 2025, the rate of increase in the average price level is higher than the rate of increase in the average price level in February 2025,” the bureau said.
The statistics body said the headline inflation rate was driven by cost of food, transport, and accommodation services.
The statistics firm said food inflation rate in March 2025 was 21.79 percent on a year-on-year basis.
“However, on a month-on-month basis, the bureau said the food inflation rate was 2.18 percent in the period reviewed, up by 0.50% compared to February 2025 (1.67%).
“The increase can be attributed to the rate of increase in the average prices of Ginger (fresh), Garri (Yellow), Broken Rice (Ofada), Honey (Natural Production), Crabs, Potatoes, Plantain Flour, Periwinkle (Unshelled), pepper (fresh),” the NBS said.
The NBS report said food inflation, on a year-on-year basis, was highest in Oyo (34.41 percent), Kaduna (31.14 percent), and Kebbi (30.85 percent).
On the other hand, states such as Bayelsa (9.61 percent), Adamawa (12.41 percent), and Akwa Ibom (12.60 percent) recorded the slowest rise in food inflation on a year-on-year basis.
The bureau also said on a month-on-month basis, food inflation was highest in Oyo (19.74 percent), Kaduna (17.24 percent), and Kebbi (14.03 percent) while states like Sokoto (-14.10 percent), Nasarawa (-9.91 percent) and Edo (-5.78 percent) recorded a decline.
Why March inflation defied analysts’ projections – Experts
According to analysts at CardinalStone, the uptick stemmed from renewed FX pressures, amid heightened global risk-off sentiment that triggered net FPI outflows and increased dollar demand in the local market.
“Consequently, the Naira weakened by 2.4 percent month-on-month over the period. In addition, domestic PMS prices rose across the country, following the temporary suspension of the Naira-for-crude swap arrangement,” it reported.
Core inflation, which excludes volatile food and energy prices, continued its upward trend, climbing to 24.4 per cent year-on-year in March from 23.0 in February.
In contrast, food inflation eased to 21.8 per cent in March, down from 23.5 per cent in the previous month.
On a month-on-month basis, the price pressures were noticeable, with headline, rising by 3.9 per cent, higher than the 2.0 per cent recorded in February.
Half of Nigerians spend 100% of incomes on food, says report
However, a new report says about 50.1 percent of Nigerians spend almost all their monthly incomes on food.
The maiden edition of the Nigerian Consumer Outlook Report also says rising electricity costs have pushed 18.5 per cent of households to adopt solar energy solutions, while 31.7 per cent of the population now relies on self-employment as their primary source of income.
The report, conducted by SEID, a marketing communications firm in Lagos, surveyed over 7,000 Nigerians across the six geo-political zones. It highlights how people are adapting their spending habits, brand preferences and purchasing decisions in response to the current economic climate.
Highlighting the spending priorities this year, the report showed that food continues to remain the top spending priority, taking up 50 per cent of the average consumer’s income in Nigeria.
The report highlights income distribution across the country, revealing that more than half of Nigerians earn less than N100, 000 monthly, underscoring income inequality and financial constraints.
The report further stated that while educated workers struggle with underemployment, individuals with advanced degrees tend to earn more, yet face limited access to high-paying job opportunities.
The report stated that a larger number of individuals with first degrees earn between N100, 001 and N800, 000 monthly compared to those with other qualifications.
Meanwhile, individuals with National Diploma/Nigeria Certificate in Education qualifications account for the largest share of Nigerians earning below N100, 000, while those with postgraduate degrees dominate individuals earning N800, 000.
The report revealed that a higher proportion of respondents earning between N800,000 and N900,000 have no formal education compared to those with only primary education, suggesting that many are entrepreneurs or business owners (commonly referred to as traders) thriving outside traditional employment structures.
According to the report, self-employment is the primary source of income for 42.9 percent of respondents, reflecting a growing shift toward entrepreneurship.
Also, the report noted that more than half of the unemployed population possesses only Senior Secondary School Certificate Examination certificates.
The report further highlighted that reduced spending on non-essentials is likely to affect luxury and lifestyle categories such as fashion, travel, dining out, premium gadgets and high-end beauty products.
“A growing segment of consumers is investing more in health and wellness, with increased attention to healthy eating and routine medical check-ups. As consumers prioritise essential needs, brands in these discretionary sectors may experience slower sales, especially among middle-income earners adjusting to economic pressures,” the report stated.
Speaking on the significance of the report, the Managing Partner at SEID, Tubosun Akeju, said the Nigerian market has experienced multiple layers of changes in recent years, from generational and cultural shifts to technological innovations and changes in government policies.
Akeju said the average Nigerian consumer today is different from that of about 10 years ago, emphasising that recent policy changes have further underscored the importance of understanding the realities of Nigerian consumers and how they are navigating the evolving economic realities.
He noted that while there are tremendous opportunities within the Nigerian market, its success requires the right insight into the unique characteristics of its consumers.
Akeju explained that the NCOR 2025 report offers critical perspectives and spotlights some opportunities for brands, investors and policymakers to navigate this transformation successfully.
He noted that it also provides a unique window into the challenges and untapped opportunities within the market.
Partner at Dentons ACAS-LAW, Afolabi Caxton-Martins, described the report as a timely and well-researched resource that goes beyond presenting statistics.
He noted that it captures the lived realities of Nigerians and how they are adapting to the country’s constantly evolving economic environment.
According to Caxton-Martins, the report outlines shifting spending priorities and emerging consumer behaviours, highlighting clear patterns that investors, policymakers and businesses can leverage.
