A general view of Tejuosho Market in Yaba, in Nigeria's commercial capital Lagos, Nigeria, April 15, 2025. REUTERS/Sodiq Adelakun

By Chijioke Ohuocha

ABUJA (Reuters) -Nigeria's headline inflation fell to its lowest level in more than three years in September, driven by a moderation in food prices, official data showed on Wednesday, offering some relief to policymakers battling cost-of-living pressures.

The National Bureau of Statistics said the consumer price index dropped to 18.02% year-on-year last month, down from 20.12% in August.

Inflation had peaked near 35% in December, before the statistics office revised its base year and adjusted the weighting of items in its price basket earlier this year.

Food inflation, which accounts for the bulk of household spending, eased to 16.87% in September from 21.87% the previous month, reflecting improved supply conditions and seasonal harvests.

Food and non-alcoholic beverages, restaurants and accommodation services, and transport contributed the most to inflation, the NBS said.

The slowdown comes as Nigerians continue to grapple with the economic fallout of sweeping reforms introduced by President Bola Tinubu, including the removal of fuel subsidies and the unification of the exchange rate. While aimed at restoring fiscal discipline and attracting investment, the measures have triggered a sharp rise in living costs.

The Central Bank of Nigeria last month cut its benchmark interest rate for the first time since 2020, citing projections for continued disinflation. Governor Olayemi Cardoso said the bank was targeting single-digit inflation and would maintain a data-driven approach to monetary policy.

Analysts say the sustained decline in inflation could give the central bank room to further ease rates, though risks remain from weak consumer demand and fiscal pressures.

(Additional reporting by Shamsuddin, Md, Editing by MacDonald Dzirutwe and Alex Richardson)