Nigeria’s Inflation Decline Signals Stabilisation, but Rural Risks Emerge, Says CPPE
Nigeria’s inflation rate fell to 15.10 per cent in January, a shift the Centre for the Promotion of Private Enterprise (CPPE) describes as a significant move toward macroeconomic stabilisation with positive implications for households and investors. The think tank’s founder, Dr. Muda Yusuf, commented on the data released by the National Bureau of Statistics (NBS), noting that the easing of price pressures was broad-based across the consumer price index.
The decline was driven by a sharp moderation in food inflation, which dropped to 8.89 per cent year-on-year in January from 29.63 per cent in the same month last year and 10.84 per cent in December 2025. Core inflation, which excludes volatile food and energy items, also slowed to 17.72 per cent year-on-year from 18.63 per cent in December 2025, indicating that price relief is extending beyond food.
Dr. Yusuf highlighted that the substantial fall in food inflation will deliver major welfare benefits, given that food constitutes the largest share of household expenditure in Nigeria. Lower food prices are expected to boost real purchasing power, particularly for low-income families, alleviate food security pressures, and support a gradual recovery in consumer demand for other goods and services. If the trend holds, it could stimulate retail trade, manufacturing, and service sector activity, contributing to broader economic recovery.
However, the CPPE warned that sustained declines in farm-gate prices pose risks to rural economies. Persistent weak prices could reduce farmers’ revenues and investment capacity, weaken rural purchasing power, and discourage agricultural production. This may lead to future supply shortages and renewed inflationary pressures. Dr. Yusuf stressed the need to balance consumer affordability with producer sustainability to safeguard national food security.
He recommended targeted measures to protect farm incomes while maintaining food affordability, including productivity support, minimum guaranteed prices for key crops, strategic food reserves, and expanded agro-processing to manage surplus output.
Meanwhile, state-level inflation disparities persist. January’s headline inflation was highest in Benue, Kogi, and the Federal Capital Territory, and lowest in Ebonyi, Katsina, and Imo. This pattern underscores the role of transport costs, security conditions, and supply-chain efficiency in regional price formation, reinforcing the need for structural reforms to achieve durable nationwide price stability.
The CPPE concludes that consolidating the current disinflation while protecting agricultural productivity and rural livelihoods will be critical to transforming temporary price moderation into lasting stability and inclusive growth.
