Nigeria’s inflation rate may have witnessed a decline, but the current level isn’t healthy for households and businesses yet. The year-on-year inflation rate was 18.02% in September 2025, a decrease from 20.12% in August 2025. A 2025 full-year estimate projected an average rate of 26.45%, though this is a forecast, and recent data shows a decline.
At double digits, the country’s inflation rate is still high. As of September, the rate is higher than what is obtainable in Rwanda (6.2%), Morocco (0.4%), Namibia (3.5%), South Africa (3.5%), Kenya (4.6%), Ghana (9.4%), amongst others.
High inflation rates reduce purchasing power for consumers, disincentivise savings, raise interest rates, increase economic uncertainty, discourage exports, and harm those with lower wages.
Apparently, the thinning local wallets are hurting. From tomato sellers in Kano to the grocery markets in Oke-arin, the factory lines in Kaduna, the transporters winding down overstretched highways along Ore, retail stores across Aba, and the C-Suites etched within the tall corporate offices along Marina, the tales are the same. The consumers are squeezed. Businesses are pressed. Start-ups are finding it hard to pick up. Operating models are being put to tough tests.
The realities are scary. Utility costs have skyrocketed. The cost of fuel, which is hardly escapable in an environment where a constant electricity supply is a luxury, has gone up.
Rent and lease are also on the increase. Logistic costs are almost unbearable. All of these stifling issues combine with weakening consumer purchasing power and depressed employee morale to create a serious headache for business owners, CEOs and investors. Part of the concerns is – as operating costs soar, profit margin shrinks on the back of lower consumer purchasing power and increasing demand by employees for a pay increase.
Meanwhile, Nigeria continues to be a lucrative market. A young and growing population holds the prospect of improved demand for goods and services in future. The current government administration under its Renewed Hope agenda has also said it is prioritising economic growth by developing policies targeted at attracting investors.
For the optimists, the long-term prospect of these policies is impressive. However, putting in place survival strategies in the face of current operational challenges is key to staying afloat in the long run.
Deploying proactive and agile measures sounds like a great strategy, especially at this time. Here are some strategies for thriving in the current inflationary environment:
- Diversify Investments – Limit your exposure to a singular market, diversifying your investments by purchasing tangible assets such as gold and real estate to lock money in. These assets can be sold off after the devaluation crisis is over. Also, you can decide in favour of seeking financing opportunities in other markets and favourable environments.
- Contract Renegotiation – Most outsourcing contracts are not set in stone. To save cost, you may like to review your existing contracts with suppliers to cut what is no longer necessary or can be replaced easily through other options. According to insights shared by Rocket Lawyer, a business expert, here are some tips to help you review your existing contracts to make cost savings:
a. Are there things that a vendor or service provider includes in your contract that you no longer need?
b. Is there anything that you could handle in-house with your own staff instead of outsourcing it?
c. Are there other companies that might supply the same service for less?
d. Are there lower service levels available that would work for your company and result in a cost reduction? - Digital Transformation– Adopting digital tools and automating tasks that usually require manual processes can save you overhead costs. Invoicing, accounting, HR management, Customer Relationship management and project management tools can come in handy.
- Energy Transition –Energy use can be a major cost centre. Auditing your energy expenses and putting in place measures to reduce cost will go a long way to reducing cost. Take measures such as turning off office equipment after office hours, installing energy-saving bulbs, and maximising peak and off-peak utility hours.
