Banana (Musa acuminata), the second most cultivated fruit worldwide, generates approximately 220 tons of agricultural waste per hectare annually, with nearly 80% of the plant biomass remaining underutilised after harvest. Banana inflorescence, an underutilised by-product of banana cultivation, is commonly discarded despite its rich nutritional and bioactive composition, contributing to agricultural waste and environmental concerns. This study aimed to develop and evaluate banana inflorescence lozenges as a nutraceutical supplement while promoting sustainable agricultural waste valorisation. Freeze-dried banana inflorescence powder was incorporated into a hard lozenge formulation using the melt-and-mould method, and the formulation was optimised through physical evaluation. The optimised lozenges demonstrated acceptable mechanical properties, including friability of 0.13%, hardness of 55.16 kg/cm², and disintegration time of 35 min. Fourier-transform infrared spectroscopy with attenuated total reflectance (FTIR–ATR) confirmed the compatibility between the active ingredient and excipients. The formulated lozenges exhibited a total phenolic content of 22.74 ± 0.74 mg GAE/g DW and moderate antioxidant activity, with ABTS and DPPH IC₅₀ values of 30.65 mg/mL and 72.53 mg/mL, respectively. In vitro antidiabetic assays demonstrated α-glucosidase inhibition of 45.80% and α-amylase inhibition of 98.11%. Mineral analysis further revealed appreciable levels of potassium, magnesium, calcium, and iron. Although some reduction in bioactivity was observed following processing and formulation, banana inflorescence still demonstrated potential as a sustainable functional ingredient for nutraceutical applications and agricultural waste valorisation. Further studies involving stability assessment and in vivo validation are recommended.