Nigeria’s headline inflation dropped to 20.12 percent in August 2025, compared to 21.88 percent in July, according to the latest data released by the National Bureau of Statistics (NBS).
The decline coincided with the Federal Government’s suspension of the four percent Free on Board (FOB) levy recently introduced by the Nigeria Customs Service (NCS) on all imported goods.The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, ordered the suspension in a directive dated September 15, 2025. The letter, signed by R. O. Omachi, Permanent Secretary, Special Duties at the ministry, was addressed to the Comptroller-General of Customs.Edun explained that the decision followed wide consultations with trade experts, industry operators, and government stakeholders. He noted that the levy, if implemented, would have raised business costs, worsened inflation, and threatened economic stability.“The suspension provides room for broader stakeholder engagement and a thorough review of the levy’s framework and wider economic implications,” the minister said, stressing the need for a more balanced revenue structure that encourages growth while supporting government finances.
According to the NBS report, year-on-year headline inflation eased to 12.03 percent in August, down from 32.15 percent in August 2024. The bureau attributed the slowdown to moderating food and energy prices, as well as technical changes following a rebasing exercise.Month-on-month, inflation stood at 0.74 percent, a sharp decline from 1.99 percent in July.Food inflation also dropped significantly to 21.87 percent year-on-year in August, compared to 37.52 percent in August 2024. The NBS cited declines in the average prices of staple items such as imported and local rice, maize flour, sorghum, millet, semolina, and soya milk.On a monthly basis, food inflation slowed to 1.65 percent in August from 3.12 percent in July.Core inflation which excludes volatile agricultural produce and energy stood at 20.33 percent year-on-year, down from 27.58 percent in August 2024. However, on a monthly basis, the core index inched up to 1.43 percent from 0.97 percent in July.Urban inflation was recorded at 19.75 percent year-on-year in August, compared to 34.58 percent a year earlier, while rural inflation fell to 20.28 percent from 29.95 percent in August 2024.At the state level, the highest year-on-year headline inflation rates were recorded in Ekiti (28.17 percent), Kano (27.27 percent), and Oyo (26.58 percent). Zamfara (11.82 percent), Anambra (14.16 percent), and Enugu (14.20 percent) recorded the lowest increases.For food inflation, Borno (36.67 percent), Kano (30.44 percent), and Akwa Ibom (29.85 percent) topped the list, while Zamfara (3.30 percent), Yobe (3.60 percent), and Sokoto (6.34 percent) recorded the lowest increases Customs Levy Suspension
The suspension of the FOB levy marks a significant policy reversal by the Federal Government. The levy, provided for in Section 18(1)(a) of the Nigeria Customs Service Act 2023, was intended to replace earlier funding models for customs operations, including the one percent Comprehensive Import Supervision Scheme (CISS).
Earlier in February, the NCS had temporarily suspended implementation of the levy following pushback from stakeholders. The latest directive by the finance minister, however, appears to have shelved the initiative entirely.Customs spokesperson Abdullahi Maiwada had previously explained that the levy was designed to provide sustainable funding for modernisation initiatives and close gaps left by the repeal of earlier funding frameworks. However, Edun’s directive signals the government’s intention to revisit the policy to ensure it aligns with broader economic priorities.
