Nigeria’s headline inflation eased consecutively in July, but a sharp acceleration in food prices is complicating the country’s disinflation story and limiting the relief households are likely to feel. The headline inflation rate fell to 15.43 percent in July 2026, from 15.91 percent in June, according to the National Bureau of Statistics (NBS). The July reading was 0.48 percentage points lower than June and substantially below the 24.94 percent recorded in July 2025.
The result was broadly consistent with BusinessDay’s inflation forecast, which had projected headline inflation at 15.51 percent for July. The official figure therefore came in just 0.08 percentage points below the forecast, indicating that the model captured the direction and broad magnitude of the monthly moderation relatively closely. But beneath the headline improvement, food prices moved in the opposite direction.
Food inflation rose to 20.31 percent year-on-year in July, from 17.52 percent in June, while the month-on-month food inflation rate accelerated sharply to 5.56 percent, up from 3.75 percent in June, according to the NBS. The increase was driven by higher average prices of products including crayfish, fresh pepper, onions, carrots, rice, water yam, tomatoes, garri, plantain, beef, eggs, guinea corn and ginger.
This divergence matters because food carries a significant weight in Nigerian household spending. A moderation in headline inflation can therefore coexist with continued pressure on household budgets if food prices accelerate.
The NBS data also show that the broader disinflation trend remains intact. Average food inflation for the 12 months ending July 2026 fell to 16.06 percent, from 30.85 percent in the corresponding period a year earlier, a decline of 14.79 percentage points.
On a month-on-month basis, headline inflation also slowed to 1.57 percent in July, from 1.66 percent in June, reinforcing evidence that the underlying pace of price increases is moderating.
BusinessDay’s July inflation forecast, produced before the NBS release, projected headline inflation at 15.51 percent using an ARIMAX model incorporating lagged inflation, official exchange-rate movements, business activity measured by the Stanbic IBTC/S and P Global Purchasing Managers’ Index, the inflation-rebasing dummy and inflation persistence.
The small 0.08 percentage-point deviation between the forecast and the official release suggests that the model remained reasonably accurate in capturing the direction of price movements, although the food-inflation acceleration highlights an important limitation of relying on the headline number alone.
The moderation in headline inflation reflects improving macroeconomic conditions, including greater exchange-rate stability and the fading effects of earlier shocks from the 2023 fuel-subsidy removal and foreign-exchange reforms.
But sustaining the disinflation trend may prove more challenging as food supply constraints, logistics costs, energy prices and domestic production capacity increasingly shape inflation.
Ayo Teriba, chief executive officer of Economic Associates, said improved foreign-exchange conditions and stronger market liquidity had created a more favourable environment for inflation moderation.
Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said external developments, particularly energy prices, remained a risk to domestic inflation.
The July figures therefore present a mixed picture. Headline inflation is moving in the right direction, and BusinessDay’s forecast came remarkably close to the official outcome. But the sharp rise in monthly food inflation shows why lower headline inflation should not yet be confused with broad-based relief in the cost of living.
For the Central Bank of Nigeria, the distinction is important. Sustained moderation in headline inflation could strengthen the case for gradual monetary easing, but accelerating food prices may keep policymakers cautious.
The broader policy challenge is shifting from containing demand and exchange-rate shocks towards increasing the economy’s capacity to producing and distributing food and other essential goods efficiently.
Nigeria is winning the first battle against inflation. The harder battle is making that disinflation felt in household kitchens.