The Centre for the Promotion of Private Enterprise (CPPE) has reported a significant moderation in Nigeria’s inflation rate for January 2026, describing the development as a major macroeconomic shift with positive implications for household welfare, the investment climate, and policy direction.
In its latest policy brief released on Monday and signed by its Chief Executive Officer (CEO), Dr Muda Yusuf, the private-sector advocacy group stated that headline inflation declined to 15.10 percent year-on-year in January 2026, compared with 27.61 percent recorded in January 2025 and 15.15 percent in December 2025.
Month-on-month inflation, according to the group, also turned negative at −2.88 percent, indicating a real reduction in price levels relative to the previous month.
It further stated that the disinflation trend reflects broad-based easing across major components of the consumer price index, particularly food prices, which play a dominant role in household expenditure in Nigeria.
The report showed that food inflation fell sharply to 8.89 percent year-on-year in January 2026, down from 29.63 percent in January 2025 and 10.84 percent in December 2025.
Yusuf added that, on a monthly basis, food prices dropped by −6.02 percent, largely driven by declines in staple food costs.
He said core inflation, which excludes volatile agricultural produce and energy prices, also moderated to 17.72 percent year-on-year, compared with 18.63 percent in December 2025, suggesting that price pressures are easing beyond the food sector, although structural challenges remain.
“Urban and rural inflation rates declined to 15.36 percent and 14.44 percent respectively, indicating that the moderation in prices is widespread across geographic locations,” it stated.
The CPPE noted that the data points to what it termed real disinflation rather than temporary price volatility.
The think tank explained that falling food prices could significantly improve household welfare because food accounts for the largest share of consumer spending in the country.
“Lower prices are expected to improve purchasing power, reduce poverty pressures, and support recovery in demand for non-food goods and services.
“If sustained, this could stimulate retail trade, manufacturing output, and service-sector activity, contributing to broader economic recovery,” Yusuf maintained.
Despite the benefits for consumers, the CPPE warned that declining food prices could create challenges for farmers and rural livelihoods.
It noted that prolonged weakness in farm-gate prices may reduce farmers’ revenues and investment capacity, weaken rural purchasing power, and discourage agricultural production, potentially triggering future supply shortages and renewed inflation pressures.
The group therefore stressed the need for policies that balance consumer affordability with producer sustainability to protect national food security.
The CPPE said the current inflation trend creates room for cautious monetary easing, although policy decisions should remain data-driven, given that core inflation and average annual inflation remain elevated.
It also recommended targeted government measures to support agricultural productivity and farm incomes, including minimum price guarantees for selected crops, strategic food reserves, and expansion of agro-processing capacity to absorb surplus output.
The report further highlighted regional disparities in inflation, noting that transport expenses, insecurity, and supply-chain inefficiencies remain major drivers of price differences across states.
For investors and businesses, the CPPE said easing inflation, particularly food inflation, signals a gradual recovery in real consumer demand, creating opportunities in consumer goods, logistics, retail, and services.
“However, companies may need to rely less on price increases for revenue growth and instead focus on productivity, cost efficiency, and scale.
“Lower primary food prices could also strengthen investment opportunities in storage, processing, cold-chain infrastructure, and export-oriented agribusiness,” it added.
The think tank posited that sustained disinflation could support gradual interest-rate moderation and improved equity market valuations, encouraging long-term productive investments.
Yusuf said Nigeria’s January inflation outcomes show a transition toward macroeconomic stabilisation driven mainly by declining food prices and easing core inflation.
He emphasised that the key policy priority is to consolidate the gains while protecting agricultural productivity and rural livelihoods to achieve durable price stability and inclusive economic growth.