Author - Yahya Abdulrahman

Dear Esteemed Client,
Nigeria’s headline inflation rate continued its downward trajectory in January 2026, easing to 15.10% relative to the 15.15% recorded in December 2025. On a year-on-year basis, inflation fell sharply by 15.10% from 27.61% recorded in January 2025. The Consumer Price Index (CPI) declined to 127.4 points in January from 131.2 in December, representing a 3.8-point decrease. On a month-on-month basis, inflation was -2.88% in January, which was 3.42% lower than the rate recorded in December 2025 (0.54%), showing a lower rate of price increases. The 12-month average inflation rate stood at 21.97% for the twelve months ending January 2026, up from 17.59% in January 2025.

Disaggregating the inflation, urban inflation eased to 15.36% year-on-year in January 2026, a significant decline from 29.45% in the same month of 2025. However, it eased month-on-month to -2.72% from 0.99% in December. The 12-month average urban inflation rate rose to 22.30% in January 2026, which was 3.42% points higher compared to the 18.88% reported in January 2025. Similarly, rural inflation stood at 14.44% year-on-year, lower by 10.60% points compared to the 25.04% recorded in January 2025. On a monthly basis, it fell to -3.29% from -0.55% in December, while the 12-month average rural inflation rate declined to 21.03% from 30.79% a year earlier (January 2025).

Food inflation, a key component of headline inflation, dropped markedly to 8.89% year-on-year from 29.63% in January 2025, partly due to the base-year effect. On a month-on-month basis, the Food inflation rate in January 2026 was -6.02%, down by 5.66% compared to December 2025 (-0.36%). The decrease can be attributed to the rate of decrease in the average prices of Water Yam, Eggs, Green Peas, Groundnut Oil, Soya Beans, Palm Oil, Maize (Corn) Grains, Guinea Corn, Beans, Beef Meat, Melon (Egusi) Unshelled, and Cassava Tuber. The 12-month average food inflation rate also fell to 20.29% for the twelve months ending January 2026, compared with the 38.47% recorded in January 2025

The “All items less farm produces and energy” or Core inflation, which excludes the prices of volatile agricultural produces and energy, stood at 17.72% in January 2026 on a year-on-year basis, showing a decline of 7.55% when compared to the 25.27% recorded in January 2025. On a month-on-month basis, the Core Inflation rate was -1.69% in January 2026, down by 2.26% compared to December 2025 (0.58%). The average twelve-month annual inflation rate was 22.84% for the twelve months ending January 2026, which was 4.40% points lower than the 27.24% recorded in January 2025