Nigeria’s headline inflation rate moderated slightly to 15.10% year on year in January 2026, down from 15.15% in December 2025, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics.
The marginal decline of 0.05 percentage points continues a multi-month trend of easing inflation, offering a glimmer of hope that price pressures may be stabilizing. On a year-on-year basis, the January 2026 rate represents a dramatic improvement compared to 27.61% recorded in January 2025.
However, despite this consistent decline, many Nigerians report that they have yet to feel the benefits in their daily spending. Surveys and market observations indicate that the cost of essential goods and services—particularly in urban centers—remains high, with staple food items, transport, and household expenses continuing to strain household budgets. Analysts note that while headline figures signal moderation, the impact of past inflationary shocks, supply constraints, and imported cost pressures has prevented these improvements from translating fully to consumer affordability.
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Inflation Trends and Key Drivers
Month-on-month, Nigeria experienced a contraction in prices, with inflation falling by 2.88% in January, compared to a 0.54% increase in December 2025. This 3.42 percentage point drop indicates that the general price level fell during the month, with some relief particularly in agricultural produce and select manufactured goods. Yet, broader inflation remains elevated: the twelve-month average CPI for the period ending January 2026 stands at 21.97%, up 4.37 percentage points from the same period a year ago, highlighting persistent underlying price pressures.
Food inflation, which accounts for the largest share of household expenditures, declined sharply to 8.89% year on year in January 2026, from 29.63% in January 2025. Month-on-month, food prices fell by 6.02%, a steep decline from –0.36% in December 2025. Staples such as water yams, eggs, green peas, groundnut oil, soya beans, palm oil, maize grains, guinea corn, beans, beef, melon (egusi), cassava tubers, and cowpeas recorded notable price reductions. The twelve-month average food inflation rate stood at 20.29%, signaling sustained easing over the past year.
Core inflation, which strips out volatile food and energy prices, moderated to 17.72% year on year, down from 25.27% in January 2025. Month-on-month, core prices declined 1.69%, reflecting slower growth in non-food items such as housing, education, healthcare, and transport. The twelve-month average core inflation dropped to 22.84%, illustrating that although headline pressures have moderated, significant cost pressures remain in the broader economy.
Urban and Rural Disparities
Urban areas saw inflation decline to 15.36% year on year, a fall of 14.09 percentage points from January 2025. Month-on-month, urban prices fell 2.72%, indicating some easing in cities. Nonetheless, the twelve-month average urban inflation remained elevated at 22.30%, suggesting that high prices in key consumption categories continue to affect households.
Rural inflation mirrored the downward trend, with year-on-year inflation at 14.44%, down from 25.04% a year prior. Month-on-month, rural prices fell 3.29%. The twelve-month average rural inflation decreased to 21.03%, indicating that while rural households have seen price pressures ease, cost-of-living challenges persist, particularly for staple foods and agricultural inputs.
Why Consumers Are Still Feeling the Pinch
Despite the encouraging moderation in headline and food inflation, many Nigerians lament that the numbers do not fully capture their lived experience. Transport costs, fuel-related price adjustments, and imported goods have kept overall household expenses elevated. Analysts note that while the CPI provides a macroeconomic snapshot, it may understate regional disparities, supply chain disruptions, and the residual impact of inflation from 2025.
The perceived disconnect has raised questions about the real-world impact of monetary policy interventions. The Central Bank of Nigeria (CBN) has maintained tight liquidity and high-interest rates to curb inflation, a policy economists say has a negative impact on the economy as it makes borrowing difficult, especially for SMEs.
However, economists highlight that January’s easing trend is nevertheless a positive signal for the first quarter of 2026. It suggests that supply-side pressures may be easing and that policy measures—such as targeted subsidies, import facilitation, and improved agricultural output—are beginning to have some effect. Still, they caution that for inflation to have a meaningful impact on household consumption, price reductions must become widespread, sustained, and reflected in the cost of goods and services that matter most to Nigerians.
Looking ahead, analysts expect that the central bank will respond to the decline by easing interest rates as soon as the next Monetary Policy Committee meeting. While the headline inflation moderation is a welcome development, it has ignited a discussion about ensuring that price relief reaches Nigerian consumers, which is deemed critical for sustaining confidence in the economy and supporting broader economic recovery.