Nigeria's Inflation Cools to 16% as Regional Disparities Narrow
October data shows a dramatic deceleration from a 34% peak, but state-level variations reveal uneven recovery
Nigeria's headline inflation rate dropped to 16.05% in October 2025, down from 18.02% the previous month and less than half the 33.88% recorded a year earlier, according to the latest Consumer Price Index data. The deceleration marks a significant milestone in the country's battle against price pressures that peaked in late 2024.
The Consumer Price Index rose to 128.9 in October from 127.7 in September, representing a month-on-month increase of 0.93%. While prices continue to climb, the pace of acceleration has moderated substantially from the double-digit monthly gains seen in 2024.
Food Costs Drive Price Pressures
Food and non-alcoholic beverages contributed 6.42 percentage points to the headline figure, accounting for 40% of total inflation. Restaurants and accommodation services added another 2.07 points, while transport costs contributed 1.71 points.
Housing, water, electricity, gas, and other fuels—critical components for real estate market dynamics—contributed 1.35 percentage points to October's inflation rate. The housing category represents the fourth-largest driver of consumer price increases, underscoring persistent pressure on shelter costs despite the broader disinflation trend.
Urban-Rural Convergence
Urban inflation registered 15.65% year-on-year in October, down from 36.38% twelve months earlier—a dramatic 20.73 percentage point decline. Rural areas recorded 15.86% annual inflation, down 15.73 points from 31.59% in October 2024.
The convergence is striking: urban and rural inflation rates now differ by just 0.21 percentage points. However, monthly dynamics diverge. Urban prices accelerated 1.14% month-on-month in October versus 0.74% in September, while rural inflation decelerated to 0.45% from 0.67%.
State-Level Disparities Persist
State-level data reveal significant regional variations in both price levels and inflation trajectories:
Highest Annual Inflation (All Items, YoY):
Bayelsa: 20.6%
Ekiti: 20.1%
Nasarawa: 19.0%
Zamfara: 18.8%
Kwara: 17.9%
Lowest Annual Inflation:
Bauchi: 10.0%
Enugu: 13.1%
Edo: 12.7%
Kaduna: 12.7%
In food inflation specifically, Nasarawa leads at 20.0% year-on-year, while Katsina records just 4.2%—a nearly five-fold difference, highlighting supply chain and agricultural productivity disparities across states.
Implications for the housing market
For property markets, the housing component's 1.35 percentage point contribution to headline inflation suggests continued pressure on shelter costs, though at levels substantially below the peaks of 2024. The convergence of urban and rural inflation rates, with urban areas now slightly lower, may reflect improving supply conditions in cities or shifts in demand.
However, the recent monthly acceleration in urban areas (1.14% versus 0.45% in rural areas) bears watching. Combined with services inflation and energy cost volatility, real estate developers and investors face an environment where operating costs and rental price dynamics vary dramatically by geography.
The 12-month average inflation rate of 22.02%, down from 32.26% a year earlier, provides a clearer picture of sustained price pressures affecting property values, construction costs, and mortgage affordability. With food accounting for 40% of the consumption basket, the income available for housing remains constrained for most households.
NB Data based on November 2009 = 100 base period for national indices; 2024 = 100 for state-level indices.
