Inflation Dips To 15.10% As Food Prices Drop to 10-year Low

…Experts eye MPC rate cuts

BY MARK ITSIBOR Abuja, BUKOLA ARO-LAMBO AND OLUSHOLA BELLO, Lagos

Nigeria’s headline inflation eased to 15.10 per cent year-on-year in January 2026, the National Bureau of Statistics (NBS) announced, crediting a sharp food price plunge to the lowest level in a decade.

“The headline inflation rate slowed to 15.10 per cent year-on-year, down from 15.15 per cent in December,” the NBS stated in its latest Consumer Price Index report, noting a month-on-month contraction of 2.88 per cent.

Food inflation plunged to 8.89 per cent, marking the lowest level in a decade since 2016, with the last single-digit reading in May 2015 at 9.78 per cent.

The NBS report showed the performance was driven by a monthly decline in prices of water yams, eggs, green peas, groundnut oil, soya beans, palm oil, maize (corn), beans, and other key grains.”

Food prices fell 6.02 per cent month-on-month, while the 12-month average stood at 20.29 per cent, “18.18 per cent points lower compared with the average annual rate of change recorded in January 2025 (38.47 per cent).”

Commenting on the development, the chief executive of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, described the data as “evidence of real disinflation rather than temporary price volatility.”

He pointed to “the decline in headline inflation to 15.10 per cent year on year, alongside a negative month-on-month rate of 2.88 per cent,” calling it “an important macroeconomic shift.””

The fact that month-on-month inflation has turned negative indicates an actual easing in the general price level relative to December.

That is a strong signal of improving price stability,” Yusuf said.

He attributed the moderation “largely driven by a sharp decline in food inflation, which fell to 8.89 per cent year on year,” adding, “The sharp moderation in food inflation carries substantial welfare benefits because food accounts for the largest share of household expenditure in Nigeria.”

Lower food prices are expected to improve real purchasing power, particularly for low-income households, reduce poverty and food security pressures, and support gradual recovery in consumer demand,” the CPPE chief explained. If sustained, “we expect to see positive spillovers into retail trade, manufacturing utilisation and service sector performance as consumer demand gradually strengthens.”

On policy, Yusuf said the trend “creates room for cautious and gradual monetary easing,” with experts now eyeing rate cuts by the Central Bank of Nigeria’s Monetary Policy Committee (MPC) at its upcoming meeting.

“The disinflation trend creates room for a cautious reassessment of interest rate policy,” he noted, though “this must remain data-driven given that core inflation and twelve-month average inflation remain elevated.”

Core inflation lingered at 17.72 per cent year-on-year, the NBS confirmed, while urban and rural rates both contracted monthly. State variations included highs in Kogi at 19.84 per cent and lows in Ebonyi at 1.69 per cent for food inflation.

Yusuf warned of risks: “While declining food prices benefit consumers, they also pose risks for farm incomes and rural economic stability. Sustained weakness in farm gate prices may reduce farmers’ revenues and investment capacity, weaken rural purchasing power and discourage agricultural production.”

He advocated balance: “There is a critical need to balance consumer affordability with producer sustainability to safeguard national food security,” urging “targeted support such as productivity enhancement, strategic reserves and expanded agro processing capacity.”

The NBS linked the relief to “an import waiver policy on select foods, which eases logistics bottlenecks and a steadier naira,” aligning Nigeria with peers like Kenya (7.8 per cent) and Ghana (3.9 per cent) food inflation.