Nigeria’s Inflation Eases for the Sixth Month in a Row

The National Bureau of Statistics (NBS) has released the latest inflation numbers for September 2025, and for the sixth month in a row, inflation is going down.

Headline inflation dropped to 18.02% in September, down from 20.12% in August. That’s a big drop, the sharpest decline so far this year and it brings inflation to its lowest level since May 2022.

On a month-to-month basis, prices rose only slightly by 0.72%, showing that the pace of price increases continues to slow.

Food Prices Are Finally Cooling Off

Food inflation, which tracks how food prices change, dropped significantly to 16.87% in September 2025, compared to 37.77% a year ago. That’s a major improvement.

Food prices fell by 1.57% between August and September. This means the average prices of many staple foods went down, thanks to better supply and the ongoing harvest season, which has helped bring more food to the market.

The big year-on-year drop is also linked to a change in the inflation base year, which makes the comparison with last year’s figures less steep.

Core Inflation and Urban vs Rural Trends

Core inflation, which excludes things like food and energy, also dropped to 19.53% in September 2025, down from 27.43% in September 2024.

On a monthly basis, it slightly declined to 1.42% from 1.43% in August, showing that non-food price increases are also slowing.

In terms of location:

• Urban inflation dropped to 17.50%, down sharply from 35.13% last year.
• Rural inflation fell to 18.26%, compared to 30.49% last year.

What This Means

Overall, Nigeria’s inflation is cooling off and while this is good news for consumers, it’s worth noting that prices are still rising, just at a slower pace. Continued stability will depend on how well supply chains, food production, and government policies hold up in the coming months.

Equities Market Update

Nigerian Stocks Ended the Week on a Positive Note

The Nigerian stock market closed the week stronger, as the All-Share Index (ASI) rose by 1.35% to settle at 148,977.78 points, while total market value increased to ₦94.56 trillion.

Trading activity picked up as investors exchanged 2.42 billion shares worth ₦76.62 billion, compared to 2.29 billion shares valued at ₦90.28 billion the previous week.

Across sectors, performance was mostly bullish:

• Insurance stocks led the way, up 2.56%, boosted by solid gains in REGALINS (+14.52%), SOVERENINS (+11.21%), and ROYALEX (+11.11%).
• Industrial Goods rose 2.79%, supported by renewed interest in Julius Berger (+5.51%), Dangote Cement (+4.35%), and WAPCO (+4.27%).
• Consumer Goods followed with a 1.93% increase, thanks to stocks like International Breweries (+3.57%) and BUA Foods (+3.22%).
• Oil & Gas inched up by 0.04%, showing mild investor activity across Eterna (+3.27%) and Aradel (+0.63%).
• Banking stocks dipped slightly by 0.13%, dragged by losses in GTCO (-1.79%), UBA (-1.87%), and AccessCorp (-1.35%), despite Stanbic (+8.26%) posting a strong gain.

In summary, the week was positive overall, with broad market gains led by Insurance and Industrial stocks, even as banks took a small hit.

Fixed Income Market Update

CBN Steps in to Tighten Liquidity

Liquidity in the financial system dropped to ₦1.80 trillion, from ₦3.39 trillion the previous week. As a result, short-term interest rates in the money market ticked higher

• Overnight rate: up to 25.07% (+10bps w/w)
• OPR: up to 24.54% (+4bps w/w)

To manage excess cash in the system, the Central Bank of Nigeria (CBN) conducted an OMO auction on Friday, offering ₦300 billion each for 193-day and 249-day bills.

Investor demand was strong, total subscriptions reached ₦2.15 trillion, and the CBN sold all the bids. Stop rates stood at:

• 193-day: 19.40%
• 249-day: 19.89%

In the secondary market, activity was mixed:

• NTBs: The 3-month paper saw strong demand, with yields falling 34bps to 16.38%.
• Bonds: Buying interest pushed yields down on the 2Y, 7Y, and 10Y papers to 16.02%, 15.96%, and 15.58%, respectively.
  However, some sell-offs were seen in 3Y and 20Y bonds, where yields rose slightly to 16.13% and 15.62%.

Market Outlook for the Coming Week

Equities (Stocks)

Looking ahead, we expect the positive momentum in the stock market to continue.
As more companies release their earnings reports, investor confidence could extend beyond large-cap stocks to the small and mid-cap names within the All-Share Index (ASI).

In short, expect more activity across a wider range of stocks, as investors look to position ahead of strong corporate results.

Fixed Income (Bonds & T-Bills)

In the fixed income space, we expect system liquidity to tilt to a negative balance after the OMO auction conducted by the CBN on Friday gets settled during the session today.

We also expect coupon inflows of approximately ₦146bn to the liquidity position today. Investors may exhibit cautious sentiments across the local fixed income space as the week commences on the back of the thinned-out liquidity, while market players will await the outcome of the meeting between the US and Russia for guidance on oil prices. In the Eurobonds market, investors will look to oil prices and other US data to guide trading sentiments within the week.

For expert insights and timely updates across the Equities Market, subscribe to Vetiva Research and stay ahead with in-depth market reports.

Ready to take action? Invest in the Equities Market today with Vetiva Trader, your gateway to smarter trading.