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According to the National Bureau of Statistics (NBS), headline inflation fell to 21.88 per cent in July from 22.22 per cent in June, mainly due to a sharp moderation in core inflation to 21.33 per cent. Food inflation, however, rose to 22.74 per cent from 21.97 per cent in June.

Cordros Research, in an emailed note, pointed out that the naira’s relative stability is expected to keep import costs steady and anchor inflation expectations. It added that the onset of the green harvest, which peaks in August, will boost food supply and exert downward pressure on prices.

“Energy prices remain somewhat volatile, but the pace of increases has been far more moderate than last year, creating room for a continued decline in year-on-year inflation, particularly for core inflation.

“For farm produce, supplies are expected to improve due to the onset of the green harvest, which typically peaks in August. This seasonal boost in availability is likely to exert downward pressure on farm produce prices, further easing food inflation in August. Consequently, we expect a further decline in the headline inflation rate in August, reflecting moderation in food and core items,” Cordros said.

Also, analysts at Commercio Partners observed that Nigeria’s inflation “appears to be entering a short-term stabilisation phase, supported by a relatively stable exchange rate, lower PMS prices, and the statistical effects of a high base from 2024.”

They added that earlier monetary tightening and improved foreign exchange liquidity are beginning to yield results, as month-on-month inflation momentum slows.

Meanwhile, the director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said a coordinated mix of monetary, fiscal, and structural interventions is required to consolidate recent years’ gains and steer the economy towards sustained stability, following the release of July inflation data.

Yusuf stated that “these developments reflect a gradually stabilising macroeconomic environment, supported by exchange rate stability, improved investor confidence, and the lingering impact of import duty waivers on key staples such as rice, maize, and sorghum. Given the high inflationary conditions in 2022, the base effect has also been a strong factor in the recent downward trend.”

CPPE boss noted that, despite these gains, pressures persist, saying, “month-on-month headline inflation rose from 1.68 per cent in June to 1.99 per cent in July, while year-on-year food inflation inched up from 21.97 per cent to 22.74 per cent.

These movements underscore the continuing vulnerability of the economy to supply-side shocks.”

Yusuf explained that, “outlook calls for caution and sustained reforms in maintaining calm in the FX market to anchor inflation expectations; addressing constraints such as high logistics and import costs, insecurity, climate risks, and port inefficiencies that elevate costs and sustain inflation; ensuring prudent government spending and managing liquidity injections effectively to prevent fueling inflationary pressures; and moving beyond conventional tightening tools (CRR, MPR) toward more creative measures to manage liquidity in the economy, given that the lending rate in the economy had risen above 30 per cent for most businesses.”

He added, “The July 2025 inflation report provides a basis for cautious optimism. While progress has been made in moderating headline and core inflation, the persistence of food and month-on-month price increases highlights unresolved structural weaknesses.”

He disclosed that a coordinated mix of monetary, fiscal, and structural interventions will be required to consolidate recent gains and steer the economy toward sustained stability.