Inflation Falls to 15.43%, but Food Prices are Moving the Other Way

Nigeria’s headline inflation rate slowed to 15.43 per cent in July from 15.91 per cent in June, but the latest Consumer Price Index data point to a less comfortable disinflation story as food prices accelerated sharply during the month.

The National Bureau of Statistics’ July CPI report showed month-on-month food inflation rising to 5.56 per cent from 3.75 per cent in June, while annual food inflation stood at 20.31 per cent.

The divergence means that while the pace of overall price increases is slowing, the prices of food items are continuing to exert significant pressure on consumers.

The headline inflation rate fell by 0.48 percentage points in July, while month-on-month headline inflation moderated to 1.57 per cent from 1.66 per cent in June.

This figure shows that Nigeria’s disinflation is not yet broad-based across the consumption basket.

Food Inflation Complicates Nigeria’s Disinflation Story

Food remains the most immediate channel through which inflation affects household purchasing power.

The acceleration in monthly food inflation is particularly significant because it came even as headline and core inflation moderated.

Core inflation, which excludes volatile agricultural produce and energy prices, stood at 14.97 per cent in July, according to the latest CPI data.

This creates a widening distinction between the broader inflation trend and the prices consumers face in food markets.

The July numbers also extend a pattern seen in June, when headline inflation edged down from 15.93 per cent in May to 15.91 per cent, while food inflation increased from 16.96 per cent to 17.52 per cent.

That suggests the food-price problem is proving more persistent than the headline inflation number alone indicates.

Falling Inflation Does Not Mean Falling Prices

At Bodija Market, one of Ibadan’s largest food markets, the moderation in Nigeria’s headline inflation has yet to translate into a clear improvement in food affordability, traders and shoppers told Business Metrics.

Mrs Funmilayo Adebayo, a Garri and Yam flour trader, said the frequency of price increases had reduced compared with previous years, but customers were still struggling with the level of prices.

“Customers come to the market expecting things to be cheaper because they hear inflation is coming down, but when they get here, they still complain that they cannot afford what they need,” she said.

Mr Sulaimon Azeez, who sells Yam at the same market, pointed out that the difference consumers are seeing is more about the pace of price increases than an actual reduction in prices.

“The prices are not increasing the way they used to, but they have not come down to where people expect. Customers still have to bring more money to buy what they used to buy before,” she said.

Food Prices Put CBN In A Difficult Position

The July CPI data will also complicate the monetary-policy outlook.

The Central Bank of Nigeria retained its Monetary Policy Rate at 26.5 per cent at its July 20-21 Monetary Policy Committee meeting. The committee had previously cut the rate by 50 basis points in February before maintaining it at subsequent meetings.

The continued moderation in headline and core inflation could strengthen the argument for another rate cut.

But the acceleration in food inflation provides a reason for caution.

Monetary policy can influence demand, liquidity and financial conditions, but food-price pressures can also arise from supply-side factors such as agricultural production, transportation, storage, weather and insecurity.

That distinction could become increasingly important for the MPC.

If core inflation continues to moderate while food inflation remains volatile, the CBN may have to balance the benefits of lower borrowing costs against the risk that premature easing could add demand-side pressure before food-supply constraints are resolved.

Why The Food Supply Chain Matters

Nigeria’s food inflation problem increasingly looks like a supply-chain problem as much as a monetary one.

Food can become more expensive even when production costs at the farm level have not risen substantially if transportation, storage, security and distribution costs increase between the farm and the consumer.

Recent market evidence has already shown that individual food prices can move differently from the broader inflation rate.

For example, a June market survey in Ibadan found declines in several staple prices between the last quarter of 2025 and the first half of 2026, including rice, while palm oil moved differently.

At the same time, SBM Intelligence’s Q2 2026 Jollof Index found that the cost of preparing a pot of jollof rice had risen to N29,578 in June 2026, up 14.6 per cent from N25,798 a year earlier.

The index tracks prices across 13 Nigerian markets and uses a basket of common household ingredients.

These differences underline why the national CPI needs to be complemented by market-level reporting.