Nigeria’s consumer inflation declines for a second consecutive month in May

Nigeria’s statistics office said on Monday that the country’s headline inflation rate (NGCPIY=ECI) dropped little for the second month of May, from 23.71% in April to 22.97% year-over-year.

The most populous nation in Africa has been struggling with excessive inflation, which last year reached 28-year highs for the second time. This was sparked by President Bola Tinubu’s decision to devalue the naira currency and eliminate expensive subsidies after taking office in 2023.

Following a rebasing procedure in which the Statistics Bureau reweighted the inflation basket and changed the base year from 2009 to 2024, the annual inflation rate dropped precipitously from 34.80% in December to 24.48% in January.

In May, food inflation, a major contributor to the headline rate, opened at 21.14% year over year (NGFINF=ECI), up from 21.26% the previous month.

Citing better macroeconomic data that supports medium-term price moderation, the central bank held its key interest rate for a second consecutive time at its second rate-setting meeting of the year last month. This comes after six hikes last year.