Inflation Eases to 15.10% as Food Prices Decline, Core Pressures Moderate

Nigeria’s headline inflation slowed to 15.10% in January 2026, slightly lower than the 15.15% recorded in December 2025.

The moderation reflects easing price pressures across major consumption categories.

On a month-on-month basis, inflation contracted by –2.88%, reversing the 0.54% increase recorded in December. This suggests a notable shift in short-term price momentum at the start of the year.

Food Inflation Drives the Slowdown

Food inflation declined sharply to 8.89% year-on-year, significantly lower than the level recorded in January 2025. On a monthly basis, food prices fell by –6.02%, indicating outright price reductions in key staples.

The decline was driven by easing prices in essential food items including grains, legumes, edible oils and protein sources. Given the significant weight of food in Nigeria’s consumption basket, this contributed heavily to the moderation in headline inflation.

Core Inflation Moderates

Core inflation, which excludes volatile agricultural produce and energy prices, stood at 17.72% year-on-year, reflecting a decline compared to the same period last year. On a month-on-month basis, core inflation fell by –1.69%, suggesting broader price stability beyond food.

This indicates that disinflationary trends are becoming more widespread across goods and services.

Urban and Rural Breakdown

Urban inflation printed at 15.36% year-on-year, while rural inflation came in at 14.44%. Both segments recorded negative month-on-month readings, reinforcing the slowdown across geographic categories.

However, the twelve-month average inflation rate rose to 21.97%, highlighting that while short-term pressures are easing, cumulative price levels over the past year remain elevated.

State-Level Divergence

On a year-on-year basis, Benue, Kogi and the Federal Capital Territory recorded the highest headline inflation rates, while Ebonyi, Katsina and Imo recorded the lowest.

The variation reflects differences in local supply conditions, consumption weights and distribution costs across states.

Market Implications

The January data strengthens the argument for monetary policy stability in the near term. With both headline and core measures moderating and month-on-month readings in negative territory, immediate pressure for further tightening appears reduced.

However, sustainability remains the key question. Exchange rate stability, agricultural output and energy pricing will determine whether the easing trend continues into the first quarter.

For financial markets, the moderation could support fixed-income stability and improve consumer purchasing power expectations. Equity markets may respond positively if the trend extends into subsequent months.

Overall, January’s inflation reading signals cooling price pressures, though structural risks remain within the broader macroeconomic environment.