The Central Bank of Nigeria (CBN) has revealed that a larger proportion of rural dwellers across the country believe that inflationary pressures are beginning to ease, in contrast to perceptions held by urban residents who continue to feel the heat of rising prices.
This insight was disclosed in the apex bank’s recent Inflation Expectation Survey for April 2025, which is part of its broader efforts to gauge public sentiment and expectations around price trends, monetary policy, and economic stability.
According to the CBN, “Analysis by settlement types reveals that a higher proportion of rural residents viewed current inflation as moderating while more urban settlers opine that inflation is high.”
According to the data, 68.2% of rural residents viewed current inflation as moderate, while 70% of urban residents see inflation as high.
The data suggests a growing divergence in how inflation is being experienced or interpreted across different socio-economic and geographic segments of Nigeria.
This disparity may reflect differences in consumption patterns, income levels, access to subsidized goods, and the general cost of living between rural and urban communities.
Urban-Rural Divide in Price Perception
Nigeria’s headline inflation rate surged to 24.23% in March 2025, according to data released by the National Bureau of Statistics (NBS).
A breakdown of the figures shows a noticeable divergence between urban and rural inflation rates:
- On a year-on-year basis, the Urban inflation rate stood at 26.12% in March 2025.
- On a month-on-month basis, urban inflation rose by 3.96%, compared to 2.40% in February—a sharp uptick of 1.56 percentage points.
The Rural inflation rate, while comparatively lower, also showed worrying signs:
- On a year-on-year basis, rural inflation was 20.89% in March 2025.
- On a month-on-month basis, it increased by 3.73%, which is 2.57% higher than the 1.16% recorded in February 2025.
Inflation Expectations Still High
Despite the perception of easing inflation among rural dwellers, inflation expectations across the broader population remain high.
The CBN survey noted that the general populace still anticipates further price increases in the near term, underscoring the importance of managing inflationary expectations through transparent and consistent policy communication.
What this means
The CBN’s findings could have implications for its inflation-targeting policies and monetary decision-making processes.
- Understanding how different demographic groups perceive inflation helps the bank tailor its communication strategy and anticipate potential socio-political responses to its policies.
- The apex bank recently raised the Monetary Policy Rate (MPR) to 27.5% in an aggressive bid to curb rising inflation, stabilize the naira, and restore investor confidence.
However, with rural communities showing signs of inflation fatigue easing, policymakers may need to consider more localized economic support or differentiated interventions that address urban inflation pain points more effectively.
