Nigeria’s Inflation Narrative Turns Cautiously Constructive: January 2026 CPI Signals Early Stabilisation

Nigeria’s inflation story entered 2026 with a subtle but symbolically important shift. The latest Consumer Price Index (CPI) report released by National Bureau of Statistics shows that headline inflation eased marginally to 15.10% year-on-year in January 2026, down from 15.15% in December 2025. While the decline is modest, it reinforces a growing consensus among policymakers and analysts that inflationary pressures may have peaked, with macroeconomic adjustments beginning to yield early dividends.

This easing reflects improved inflation expectations anchored on four critical pillars: energy pricing dynamics, exchange-rate movements, relative improvement in security conditions across key food-producing regions, and the sustained tight monetary stance that has moderated excess liquidity.

Headline Inflation: Annual vs Monthly Trends

The January outcome continues the gentle disinflationary trend observed towards the end of 2025. Both urban and rural inflation recorded marginal declines, suggesting that price pressures are easing across income and geographic segments rather than being isolated to a specific demographic.

Headline Inflation (YoY): 15.10% (December 2025: 15.15%)
Urban Inflation: 15.36% (December: 14.85%)
Rural Inflation: 14.44% (December: 14.56%)

Analysts note that the slight uptick in urban inflation, despite the overall decline, reflects lag effects from transport and housing costs, while rural inflation benefitted more directly from easing food prices and improved harvest logistics.

Food vs Core Inflation: A Structural Shift Emerging

One of the most notable developments in the January report is the sharp moderation in food inflation, long the primary driver of Nigeria’s inflationary spiral.

Food Inflation: 8.89% (December: 10.84%)
Core Inflation: 17.72% (December: 18.63%)

This divergence is significant. According to analysts at Hairametrics, the decline in food inflation reflects improved supply conditions, reduced post-harvest losses, and relative stability in energy costs, which lowered farm-to-market transportation expenses.

Core inflation, while still elevated, continues to decelerate, suggesting that pass-through effects from exchange-rate volatility and energy price adjustments are gradually fading.

State-Level Inflation: Uneven but Improving

Inflation pressures remain uneven across states, underscoring Nigeria’s structural and security-related disparities.

Highest Inflation: Benue State – 22.48%
Lowest Inflation: Ebonyi State – 8.72%

Benue’s elevated inflation reflects ongoing security challenges affecting agricultural output and logistics, while Ebonyi’s relatively low figure highlights the benefits of localized food sufficiency and improved market access.

What Is Driving the Disinflation?

1. Energy and Refining Capacity

Higher domestic fuel output from recently operational and ramping refineries has helped stabilise energy prices, reducing cost-push inflation across transport, manufacturing, and services.

2. Exchange Rate Stabilisation

The naira’s relative strengthening and reduced volatility have dampened imported inflation, particularly for food, pharmaceuticals, and manufactured inputs.

3. Monetary Tightening

Sustained high interest rates have constrained speculative demand, improved inflation expectations, and slowed excess credit growth.

4. Security Conditions

Incremental improvements in security across key agrarian belts have supported food supply chains, contributing to easing food inflation.

Federal Government Outlook for 2026

The Federal Government of Nigeria projects that inflation will remain on a gradual downward trajectory throughout 2026, aided by:

Full CPI rebasing and normalization by the NBS
Increased domestic refining capacity
Continued foreign exchange market reforms
Targeted fiscal interventions to support food production

Official projections suggest inflation could trend towards the low-14% range by year-end, provided there are no major external shocks from global energy or commodity markets.

Analysts’ Projections: Cautious Optimism

Independent analysts, including those cited by Nairalytics, broadly align with the government’s outlook but remain cautious.

Short-term (February–March 2026): Inflation expected to decline marginally, reflecting lagged effects of food price moderation and exchange-rate stability.
Mid-year 2026: Analysts forecast inflation between 13.8%–14.5%, assuming stable energy prices and continued monetary discipline.
Key Risks: Renewed FX pressures, climate-related disruptions to food supply, and potential fiscal slippages.