Nigeria Sees Inflation Fall to 20.12% as Government Halts Import Levy

Nigeria’s inflation rate decreased to 20.12% in August 2025, down from 21.88% in July, according to the latest report from the National Bureau of Statistics (NBS). This decline coincided with an announcement by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who ordered the immediate suspension of a 4% import levy on goods, a decision aimed at alleviating financial burdens on businesses and importers.

In a letter dated September 15, 2025, Edun communicated the suspension to the Comptroller-General of Customs. He noted that the levy posed considerable challenges to trade facilitation and economic stability, as stakeholders had expressed concerns about its impact on inflation and the overall business environment in Nigeria. The suspension is expected to provide a window for comprehensive stakeholder engagement and a thorough review of the levy’s framework.

The NBS attributed the 1.76% drop in inflation primarily to a decrease in food and energy prices during the review month. Year-on-year, Nigeria’s headline inflation was recorded at 12.03%, significantly lower than the 32.15% figure from August 2024.

Food inflation specifically showed a notable decrease, dropping to 21.87% year-on-year in August, compared to 37.52% in the same month last year. This reduction was attributed to a decline in average prices for various staple foods, including rice and maize flour. Month-on-month, food inflation also fell to 1.65%, down from 3.12% in July.

Core inflation, which excludes volatile agricultural and energy prices, fell to 20.33% year-on-year in August, a reduction of 7.25% from 27.58% in August 2024. The month-on-month core index increased slightly to 1.43%, compared to 0.97% in July. The average annual inflation rate for the 12 months ending in August 2025 stood at 23.04%, marking a decrease from 25.18% in the previous year.

Urban inflation recorded a year-on-year rate of 19.75% in August, down from 34.58% in August 2024. The month-on-month urban inflation index was 0.49%, a decrease from 1.86% in July. Conversely, rural inflation fell to 20.28% year-on-year, compared to 29.95% in the same month last year, with a month-on-month rate of 1.38%.

At the state level, the highest year-on-year headline inflation was recorded in Ekiti (28.17%), Kano (27.27%), and Oyo (26.58%). In contrast, Zamfara (11.82%), Anambra (14.16%), and Enugu (14.20%) reported the lowest price increases.

The directive to suspend the 4% Free on Board (FOB) charge stems from Edun’s authority under the Nigeria Customs Service Act, 2023. In a previous announcement on February 11, 2025, the Nigeria Customs Service had already indicated a suspension of the levy following industry pushback. The ongoing consultations aim to align customs revenue frameworks with national economic objectives.

As the Nigerian government navigates these economic challenges, the recent suspension of the import levy is seen as a critical step towards enhancing trade competitiveness and promoting economic stability. The finance ministry’s commitment to collaborate with the Nigeria Customs Service and other stakeholders highlights an effort to create a more sustainable revenue structure that benefits both the economy and businesses.