Nigeria’s Food Inflation Returns To Single Digit — But At What Cost?
Single-Digit Food Inflation After a Decade
NIGERIA has recorded its first single-digit food inflation rate in more than 10 years, signalling a dramatic shift in the country’s inflation trajectory and offering relief to households battered by years of rising food costs.
Data from the National Bureau of Statistics show that food inflation slowed to 8.89 per cent year-on-year in January 2026, a steep decline from 29.63 per cent a year earlier. Month-on-month, food prices fell by –6.02 per cent, reinforcing signs of sustained deflation.
Headline inflation moderated marginally to 15.1 per cent, but it is the collapse in food prices — which dominate Nigeria’s consumption basket — that has drawn the strongest reactions from analysts and policymakers.
For context, food inflation reached an all-time high of 40.87 per cent in June 2024, pushing millions toward food insecurity. The speed of the descent since late 2024 reflects converging forces: stronger foreign exchange stability, improved harvests, relative energy price moderation and import inflows.
The Drivers Behind the Drop
Analysts highlight improved domestic supply conditions in major food-producing states as a central factor. Additionally, the stabilisation of the naira has reduced import costs, allowing cheaper food imports to flood domestic markets.
The Centre for Promotion of Private Enterprise characterised the shift as broad-based disinflation with significant welfare gains, particularly for low-income households that devote a large share of income to food.
However, this relief carries structural trade-offs. Nigeria imported ₦5.27 trillion worth of food and beverages in the first nine months of 2025, intensifying competition for local farmers already grappling with high fertiliser, seed and fuel costs.
The Producer–Consumer Paradox
The current scenario presents a paradox: falling food prices benefit consumers but threaten producers.
CPPE warned that prolonged farm-gate price weakness could discourage agricultural investment, reduce rural incomes and ultimately create future supply shortages — potentially triggering a fresh inflation cycle.
Agricultural stakeholders argue that stabilisation must strike a balance. Proposals include minimum guaranteed prices for selected staples and structured mechanisms to prevent harvest-time price crashes and distress sales.
Such interventions, analysts suggest, must remain rules-based and market-friendly to avoid fiscal strain or distortions.
Outlook: Stability or Temporary Calm?
Cowry Research projects continued moderation in the near term, underpinned by favourable base effects and improved foreign exchange conditions. Nevertheless, it warned that structural bottlenecks — insecurity in farming communities, logistics inefficiencies and possible weather disruptions — remain persistent risks.
There is also concern that election-related fiscal pressures later in the year could reignite inflationary momentum.
For businesses, easing inflation signals a recovery in real household demand, creating opportunities in retail, logistics and food processing. Yet firms can no longer rely on aggressive price hikes for revenue growth, making productivity and cost efficiency critical.
Ultimately, the policy priority lies in consolidating the gains without eroding agricultural productivity. Sustained price moderation must coexist with incentives that protect farmer incomes and encourage domestic production.
Nigeria’s return to single-digit food inflation is undeniably historic. Whether it marks the beginning of durable price stability or merely a cyclical pause will depend on how policymakers manage the delicate balance between consumer relief and producer sustainability in the months ahead.
