Dare Babalola
Nigeria’s inflation rate has dropped significantly to 15.10% in January 2026, providing relief to households and signaling a meaningful transition toward macroeconomic stabilisation.
According to the Centre for the Promotion of Private Enterprise (CPPE), the decline in inflation is attributed to a broad-based easing of price pressures, including a sharp drop in food inflation to 8.89% year-on-year, down from 29.63% in January 2025.
The moderation in inflation is expected to improve real purchasing power, particularly for low-income households, and support gradual recovery in consumer demand for non-food goods and services.
However, the CPPE warns that sustained weakness in farm-gate prices may reduce farmers’ revenues and investment capacity, potentially creating future supply shortages and renewed inflation pressures.
Dr. Muda Yusuf, Chief Executive Officer of CPPE, in a policy brief on Monday emphasised the need for cautious and gradual monetary easing, targeted measures to protect farm incomes, and investments in logistics, security, and regional price stability.
This, he said, would help consolidate disinflation while protecting agricultural productivity and rural livelihoods.
The report notes that the disinflation trend is broad-based, with urban and rural inflation rates declining to 15.36% and 14.44%, respectively.
Core inflation also moderated to 17.72% year-on-year, confirming that price easing is extending beyond food into other segments of the consumption basket, according to policy brief.
The CPPE attributes the decline in food inflation to falling prices of staple food items, which recorded a month-on-month decrease of 6.02%. This development is expected to benefit consumers, particularly low-income households who spend a larger proportion of their income on food.
However, the report highlights concerns regarding farmers’ income and rural livelihoods, as sustained weakness in farm-gate prices may discourage agricultural production and create future supply shortages.
The CPPE recommends targeted measures to protect farm incomes, including productivity support and minimum guaranteed prices for selected crops.
The report also emphasises the need for investments in logistics, security, and regional price stability to address state-level disparities in inflation.
Headline inflation is highest in Benue, Kogi, and the FCT, and lowest in Ebonyi, Katsina, and Imo, highlighting the importance of transport costs, security conditions, and supply-chain efficiency in price formation.
The disinflation trend is expected to support gradual recovery in real household demand, creating opportunities for consumer goods, retail, logistics, and services. The CPPE notes that easing inflation reduces the ability of firms to rely on price increases for revenue growth, increasing the importance of cost efficiency, productivity, and scale.
The report recommends shifting policy emphasis from emergency relief to productivity, nutrition, and human-capital investment. This, it says, will help transform current price moderation into durable stability, inclusive growth, and improved investor confidence in Nigeria’s economy.
The CPPE notes that sustained disinflation could support gradual interest-rate moderation and improved equity valuations, favouring long-term productive investment over short-term inflation hedging.
Overall, the report concludes that Nigeria’s January 2026 inflation outcomes signal a meaningful transition toward macroeconomic stabilisation, driven primarily by declining food prices and supported by easing core inflation.
The development is seen as a positive step towards macroeconomic stabilisation, but policymakers are urged to consolidate disinflation while protecting agricultural productivity and rural livelihoods.
