Nigeria’s annual inflation rate eased slightly to 15.10 percent in January 2026 from 15.15 percent in December 2025, marking the tenth consecutive month of moderation, the National Bureau of Statistics (NBS) said on Monday.
The slowdown could give the Central Bank of Nigeria (CBN) room to consider cutting interest rates when it meets later this month for its first monetary policy decision of the year.
The latest figures come under a revamped methodology adopted by the NBS, which the agency says better reflects real-world prices. The new approach uses a 12-month reference period, setting the average Consumer Price Index (CPI) for 2024 at 100, replacing the previous single-month December 2024 baseline. Analysts note that this methodology smooths seasonal fluctuations and provides a more accurate picture of inflation trends.
Food prices, which historically drive headline inflation, continued to ease. The NBS reported that food inflation fell to 8.89 percent year-on-year in January, down from 10.84 percent in December 2025, reflecting improvements in agricultural output and seasonal supply adjustments in markets across the country.
Core inflation, which excludes volatile food and energy items, remains a key indicator for the CBN as it considers monetary policy. Economists say the persistent, albeit gradual, decline in headline inflation could support a modest reduction in the benchmark interest rate, aimed at stimulating growth while keeping price pressures manageable.
Nigeria, Africa’s largest economy, has struggled with high inflation for several years, with rates peaking above 18 percent in 2023. The pressure has been driven by food and energy costs, currency volatility, and lingering supply chain disruptions. Policymakers have relied on high interest rates to curb price growth, stabilise the naira, and reassure investors.
Despite the moderation, prices remain elevated for many Nigerians, particularly for staple foods such as rice, maize, and vegetables, which account for a large share of household expenditure. Analysts caution that inflation remains sensitive to factors including global commodity prices, weather-related crop disruptions, and fiscal policy measures.
Markets are watching closely as the CBN prepares to announce its first monetary policy decision of 2026. A decision to reduce interest rates could lower borrowing costs for businesses and households, boosting investment and consumption. However, the central bank will likely weigh the risk of stoking inflation against supporting economic growth.
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“The decline in inflation is encouraging, but headline rates are still well above the target band. The CBN will need to balance the dual objectives of price stability and growth as it charts policy for 2026,” said a Lagos-based economist who requested anonymity.
The easing of food inflation also aligns with broader government efforts to boost domestic agricultural production, improve supply chains, and ensure market stability. Analysts say that continued improvements in these areas, combined with prudent fiscal and monetary policies, will be critical in sustaining the downward trend in consumer prices.
As Nigeria heads into its next policy meeting, businesses and consumers alike are keenly watching whether the central bank will respond to the decade-long inflation moderation trend, and whether it will signal confidence in the country’s economic recovery and food security strategies.
Nigeria, Africa’s largest economy, has faced persistently high inflation in recent years, driven largely by food and energy prices, currency fluctuations, and supply chain disruptions. Annual inflation peaked at over 18 percent in mid-2023, prompting the Central Bank of Nigeria (CBN) to maintain high interest rates to anchor price expectations and stabilize the naira.
The National Bureau of Statistics (NBS) recently revised its inflation methodology. The new approach uses a 12-month reference period, with the average Consumer Price Index (CPI) for 2024 set to 100, replacing the previous single-month reference. Officials said the revision better reflects actual consumer prices and reduces volatility in monthly readings.
Food inflation, historically the largest contributor to Nigeria’s headline rate, has shown signs of moderation. In January 2026, food prices rose 8.89 percent year-on-year, down from 10.84 percent in December 2025, reflecting improvements in domestic agricultural output and seasonal market conditions.
Analysts monitor these trends closely because inflation influences monetary policy decisions, including interest rate settings, which impact borrowing costs, investment, and overall economic growth. The CBN is expected to announce its first policy decision of 2026 in the coming week, with markets anticipating a potential interest rate cut if the easing trend continues.
Nigeria’s inflation trajectory is also tied to broader economic reforms, including efforts to strengthen food supply chains, improve agricultural productivity, and stabilize the exchange rate. The interplay of these factors will shape price stability and the central bank’s policy stance in the months ahead.
