Central Bank of Nigeria’s May economic report shows inflation easing to 22.97% and external reserves at USD 38.16bn

The Central Bank of Nigeria published its May 2025 Economic Report, describing slower but continued domestic expansion, a further moderation in inflation, improved federation revenue, and stable financial conditions consistent with a tight monetary policy stance. The report also points to a robust external position, with a broadly stable naira and higher trade surplus alongside stronger capital inflows. Business activity remained in expansion, with the composite Purchasing Managers’ Index at 52.10. Headline inflation eased to 22.97% year-on-year (1.53% month-on-month), with food inflation at 21.14% year-on-year; the report links the moderation partly to relative stability in premium motor spirit pump prices (average NGN 910/litre versus NGN 935/litre in April) and exchange rate stability. Federation revenue rose to NGN 2.86 trillion (+15.53% month-on-month), driven by non-oil revenue of NGN 1.68 trillion (+20.58%), which accounted for 58.77% of total receipts; oil revenue increased to NGN 1.18 trillion (+9.01%). Broad money (M3) rose to NGN 119.20 trillion, up 5.16% from end-December 2024, led by net foreign assets (up 49.57%), while credit to the private sector increased by 3.51%. The naira averaged NGN 1,595.20 per USD at the Nigerian Foreign Exchange Market, external reserves stood at USD 38.16 billion (7.94 months of goods and services import cover), and the trade surplus widened to USD 1.38 billion; capital inflows increased to USD 1.70 billion. The outlook section projects continued strong growth momentum in 2025 and further near-term disinflation, while flagging risks including security concerns, potential foreign exchange market demand pressures, rising production costs, and potential domestic and external shocks.