Food inflation crashes to 8.89% as harvests flood markets
The persistent pressure on Nigerian dining tables is finally easing as a dramatic harvest of relief pulls headline inflation down to 15.10% in January 2026.
This shift, revealed by the National Bureau of Statistics, marks a significant cooldown from the 15.15% recorded in December and a massive retreat from the 27.61% seen just one year ago.
The driving force behind this macroeconomic shift is a sharp deceleration in food costs, which plummeted to 8.89% year-on-year, signaling that the era of runaway grocery prices may be nearing an end.
Improved supply conditions and better-than-expected harvests across key staples have effectively broken the back of the inflationary surge.
On a month-on-month basis, food prices actually experienced a negative movement of −6.02%, an actual easing that suggests the market is stabilizing faster than many Broadstreet analysts predicted.
While core inflation also moderated to 17.72%, the star of the report is undoubtedly the food sector, which has provided much-needed breathing room for low-income households where food accounts for the largest share of monthly expenditure.
The Centre for the Promotion of Private Enterprise (CPPE) notes that while this disinflation is a massive win for consumer purchasing power and food security, it creates a producer’s dilemma for the rural economy.
Dr. Muda Yusuf, CEO of the CPPE, cautions that if farm-gate prices drop too low, it could erode the revenues of Nigeria’s farmers and discourage future production.
This creates a delicate balancing act for the government: maintaining affordability for the masses while ensuring agricultural sustainability through minimum guaranteed prices and better storage infrastructure to absorb surplus output.
This cooling trend sends a clear message to the Central Bank's Monetary Policy Committee (MPC) ahead of their next meeting.
The consistent decline in price levels, which saw urban and rural inflation settle at 15.36% and 14.44% respectively, raises expectations for a potential policy pause or even a rate cut.
For investors, the focus is shifting away from inflation hedging and toward productive sectors like manufacturing and retail, as the economy trends toward its 2027 stabilization target.
The primary goal now is to transform this temporary price moderation into durable, inclusive growth.
Dr. Muda Yusuf, CEO of the CPPE, emphasizes that while the decline is a milestone for macroeconomic stabilization, it is not without its troubling trade-offs.
The CPPE highlights that the sharp drop partially fueled by a surge in food imports has created a producer’s dilemma where falling farm-gate prices are inflicting heavy losses on local farmers. If production costs continue to outpace selling prices, Nigeria risks a future production slump that could trigger a new cycle of scarcity.
To maintain this progress, the CPPE recommends that the government transition from emergency relief toward long-term productivity.
The policy think-thank further recommended a national farm price stabilisation framework to protect farmer incomes during harvest gluts, targeted structural interventions to reduce high logistics and energy costs that still keep core inflation elevated at 17.72% and repositioning development finance institutions (like the Bank of Agriculture) to provide concessionary financing to help agribusinesses weather the price volatility.