Economy
Inflation slows to 21.88% in July even as food prices climb
Headline inflation eased for a fourth straight month in July to 21.88% from 22.22% in June following an update to the CPI basket and base year. However, food inflation ticked higher to 22.74%, underscoring persistent pressure on household budgets. The Central Bank maintained the policy rate at 27.5%, signalling a preference to consolidate disinflation trends while monitoring exchange-rate and supply-side risks.
Source: https://www.reuters.com/world/africa/nigerias-inflation-eases-july-food-price-rise-2025-08-15/
The naira on Friday strengthened to close at ₦1,363.5 per dollar at the official foreign exchange market.
The development followed a sharp depreciation at the start of the week, according to data tracked on the Central Bank of Nigeria’s (CBN) website.
The currency fell to ₦1,425 per dollar on Monday, down from ₦1,398 per dollar recorded the previous Friday.
Monday’s drop marked its weakest closing level since January 12, 2026, when it last traded at the same rate.
By Tuesday, the naira appreciated to ₦1,390.5 per dollar. Further gains were recorded on Wednesday, when the currency traded at ₦1,373.5 per dollar.
The recovery continued on Thursday, with the naira strengthening to ₦1,370 per dollar.
The currency gained more than ₦60 within four trading days after the early-week slide, extending the recovery on Friday to close at ₦1,363.5 per dollar.
The Central Bank of Nigeria said the country’s improving external reserve position could help cushion the naira against prolonged pressure.
According to the apex bank, Nigeria’s net foreign exchange reserves rose to $34.80 billion at the end of 2025, reflecting improved external liquidity.
The governor of the apex bank, Olayemi Cardoso, said ongoing monetary and foreign exchange reforms are aimed at strengthening market confidence and improving liquidity.
Nigeria’s aggregate Value Added Tax (VAT) revenue stood at ₦2.28 trillion in Q3 2025, according to the National Bureau of Statistics (NBS).
In its latest report released on Tuesday, the agency stated that the figure represents a 10.66% quarter-on-quarter increase from ₦2.06 trillion recorded in Q2 2025.
A breakdown of the report shows that local VAT payments dominated with ₦1.12 trillion, foreign VAT payments contributed ₦680.23 billion, while import VAT accounted for ₦479.79 billion in Q3 2025.
The NBS stated: “Value Added Tax (VAT) in Q3 2025 was ₦2.28 trillion, showing an increase of 10.66% on a quarter-on-quarter basis from ₦2.06 trillion in Q2 2025.
Local payments stood at ₦1.12 trillion, foreign VAT payments were ₦680.23 billion, while import VAT contributed ₦479.79 billion in Q3 2025.”
On a year-on-year basis, VAT collections in Q3 2025 increased by 28.10% compared to Q3 2024.
On a quarter-on-quarter basis, the NBS reported that administrative and support service activities recorded the highest growth rate at 89.28%, followed by arts, entertainment and recreation at 82.49%, and human health and social work activities at 32.40%.
Conversely, real estate activities recorded the lowest growth rate at –51.33%, followed by activities of households as employers, undifferentiated goods- and services-producing activities of households for own use at –36.22%, and other service activities at –20.30%.
In terms of sectoral contributions, the top three activities with the largest shares in Q3 2025 were:
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Manufacturing – 25.89%
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Information and communication – 18.77%
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Mining and quarrying – 14.85%
On the other hand, activities of households as employers and undifferentiated goods- and services-producing activities of households for own use recorded the lowest share at 0.003%, followed by activities of extraterritorial organisations and bodies, and water supply, sewerage, and waste management at 0.03% each.
The foreign exchange (FX) market witnessed increased demand during Thursday’s trading session, driven by risk-off sentiment among Foreign Portfolio Investors (FPIs).
The heightened demand tilted the market toward the bid side, exerting upward pressure on rates. As a result, benchmark rates weakened across the board, shedding ₦3.24 to settle at ₦1,341.35/$.
The official window recorded increased dollar demand during the session, largely attributed to risk-off sentiment among FPIs.
The stronger demand tilted the market toward the bid side, exerting additional pressure on the naira across official benchmarks.
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NFEM VWAP: Fell by ₦3.24 to close at ₦1,341.35/$.
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CBN Closing Rate: Declined by ₦6.00, ending the day at ₦1,346.00/$.
Throughout the session, intraday trades fluctuated between a high of ₦1,350.00 and a low of ₦1,332.00.
Market analysts suggest that the naira’s near-term direction will continue to be influenced by prevailing supply-and-demand dynamics, as the apex bank maintains efforts to stabilise the foreign exchange market.
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