….first time in 10 yrs
…… Analysts point to improved exchange rate, harvest season gains
Nigeria’s food inflation fell to single digits in January 2026 for the first time since May 2015, signalling easing in cost-of-living pressures. This trend, first predicted by BusinessDay, aligns Africa’s most populous nation with peers such as Ghana, Ethiopia and Zimbabwe, which have recently recorded similar declines in food prices.
The Consumer Price Index report released by the National Bureau of Statistics (NBS) on Monday showed that food inflation — which accounts for more than half of Nigeria’s headline inflation basket — slowed for a sixth consecutive month to 8.89 percent, down from 10.84 percent in December.
Read also: Food inflation hits single digit first time in 10 yrs
Headline inflation moderated marginally to 15.10 per cent from 15.15 per cent, while core inflation declined by 1.69 percentage points to 17.72 per cent. Urban and rural inflation also eased to 15.36 percent and 14.44 percent, respectively, indicating broad-based disinflation.
The NBS attributed the slowdown largely to falling prices of staples including yam, eggs, maize, beans, palm oil, cassava, beef and tomatoes. On a month-on-month basis, food prices recorded a 6.02 percent deflation, underscoring a sharp, seasonal reprieve for households.
Annual average food inflation for the 12 months to January stood at 20.29 percent, a steep drop from 38.47 percent recorded a year earlier.
Drivers of the slowdown
Analysts link the moderation to improved exchange rate stability, harvest season supply gains and the federal government’s temporary import waiver policy on selected food items, which helped ease logistics constraints and expand supply.
“I expected inflation to return to single digits given the steady downward trend and the impact of import variations,” said Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise. “However, farmers are losing money, and that is hurting their businesses. Exchange-rate strengthening has also played a significant role.”
The naira appreciated by 7.82 percent in January to an average of N1,416.5/$ in the official market, reducing imported food and input costs while supporting further disinflation in FX-sensitive components of the consumer basket.
Lower food prices carry substantial welfare implications in Nigeria, where food dominates household spending. CPPE added that sustained moderation could lift real incomes, reduce poverty pressures and gradually revive demand for non-food goods and services — with positive spillovers for retail trade, manufacturing utilisation and services activity.
Continental context
Across Africa, food inflation has also cooled. Ghana’s food inflation fell to 9.5 percent in October 2025, its first single-digit reading since July 2021, supported by a stronger cedi driven by record gold prices, and has since slowed further to 3.9 percent as of January.
Zimbabwe’s food inflation declined to about four percent, aided by the April 2024 introduction of the gold-backed ZiG currency after years of monetary instability. Ethiopia’s food inflation eased to 9.8 percent in December, the lowest since 2018.
South Africa, Kenya and Tanzania continue to post single-digit food inflation readings of 4.4 percent, 7.3 percent and 5.7 percent, respectively.
Seasonal relief — and structural risks
Economists caution that Nigeria’s moderation partly reflects harvest-season dynamics.
“Typically, during the harvest period and a few months after, food inflation remains low,” said Ayokunle Olubunmi, head of financial institutions ratings at Agusto & Co. “But sustaining this requires stronger storage, logistics and distribution systems, as significant volumes of produce are still lost to spoilage.”
He added that relative calm in food-producing regions has supported supply, warning that renewed insecurity could quickly reverse gains.
Read also: Nigeria’s headline inflation drops to 15.10% in January
Consumers cheer, farmers worry
Market surveys across Lagos show clear relief among households.
“I can attest that food prices have fallen,” said Faith Ochonogu, a trader. “Last year I bought in bits; now I can afford bulk purchases.”
The price of a bag of foreign rice has dropped to about N57,000 from roughly N88,000 a year earlier, while a large basket of tomatoes in Mile 12 market has fallen by about 65 percent to N35,000.
Yet the same price declines are squeezing farm incomes. While agriculture grew 3.79 percent in the third quarter of 2025, sustained weakness in farm-gate prices could undermine rural purchasing power, reduce investment and ultimately create future supply shortages, Yusuf of CPPE warned.
Balancing consumer affordability with producer sustainability, he said, is now critical to safeguarding long-term food security.
Policy outlook
Attention is shifting to the Monetary Policy Committee’s first meeting of the year expected to take place next week. Nigeria cautiously began an easing cycle in September with a 50-basis-point rate cut, its first in five years.
With inflation trending downward, some analysts increasingly expect a further reduction that could bring the policy rate to around 26 percent, provided disinflation proves durable.
For now, single-digit food inflation offers rare relief to households, but whether Nigeria can sustain it beyond the harvest season will depend on exchange-rate stability, security in food belts and long-delayed investment in storage and logistics infrastructure.
