By Mercy Oku.
The Centre for the Promotion of Private Enterprise (CPPE) has said Nigeria’s inflation slowdown in January 2026 signals a significant shift toward macroeconomic stability, with positive implications for households, investors and policy direction.
In a recent policy brief, the Chief Executive Officer of CPPE, Dr. Muda Yusuf, noted that headline inflation declined to 15.10 per cent year-on-year in January 2026, down sharply from 27.61 per cent in January 2025 and slightly lower than the 15.15 per cent recorded in December 2025.
Month-on-month inflation also turned negative at -2.88 per cent, indicating an actual easing in the general price level compared to December 2025.
Broad-Based Price Moderation
According to the CPPE, the disinflation trend is broad-based across major components of the Consumer Price Index.
Food inflation fell significantly to 8.89 per cent year-on-year, compared to 29.63 per cent in January 2025 and 10.84 per cent in December 2025.
On a month-on-month basis, food prices declined by 6.02 per cent, driven largely by reductions in the prices of staple food items.
Core inflation also moderated to 17.72 per cent year-on-year from 18.63 per cent in December 2025, suggesting that price easing is extending beyond food into other segments of the consumption basket, despite persistent structural pressures.
Urban and rural inflation rates dropped to 15.36 per cent and 14.44 per cent respectively, reflecting geographically widespread price moderation.
The CPPE described the trend as “real disinflation” rather than temporary price volatility.
Relief for Households, Boost for Demand
The policy group said the sharp moderation in food inflation carries significant welfare benefits, given that food accounts for the largest share of household expenditure in Nigeria.
Lower food prices are expected to improve real purchasing power, particularly among low-income households, reduce poverty and food-security pressures, and support a gradual recovery in demand for non-food goods and services.
If sustained, CPPE said the trend could stimulate retail trade, improve manufacturing capacity utilisation and strengthen service-sector activity, thereby supporting broader economic recovery.
Risks to Farmers and Rural Livelihoods
Despite the positive consumer impact, the organisation warned that declining food prices could pose risks to farmers’ incomes and rural economic stability.
It cautioned that prolonged weakness in farm-gate prices may reduce farmers’ revenues and investment capacity, weaken rural purchasing power, and discourage agricultural production – potentially creating future supply shortages and renewed inflationary pressures.
The group stressed the need to balance consumer affordability with producer sustainability to safeguard national food security.
Policy Implications
On monetary policy, CPPE said the disinflation trend creates room for cautious and gradual easing. However, it urged policymakers to remain data-driven, noting that core inflation and the 12-month average inflation rate remain elevated.
The organisation also called for targeted measures to protect farm incomes while sustaining food affordability, including productivity support, minimum guaranteed prices for selected crops, strategic reserves and expanded agro-processing capacity to absorb surplus output.
Highlighting state-level disparities, CPPE noted that headline inflation was highest in Benue, Kogi and the Federal Capital Territory, and lowest in Ebonyi, Katsina and Imo.
It attributed these differences to transport costs, security conditions and supply-chain efficiency, stressing the need to address structural constraints to ensure durable nationwide price stability.
The group added that lower food inflation offers an opportunity to shift social policy emphasis from emergency relief to productivity, nutrition and human-capital investment.
Outlook for Investors
For investors and businesses, CPPE said easing inflation, particularly in food, signals a gradual recovery in real household demand, creating opportunities in consumer goods, retail, logistics and services.
However, it noted that disinflation reduces the ability of firms to rely on price increases for revenue growth, thereby increasing the importance of cost efficiency, productivity and scale.
In agriculture, while lower primary food prices may compress margins in crop production, the organisation said they strengthen the case for investment in storage, processing, cold chains and export-oriented agribusiness.
It added that sustained disinflation could support gradual interest-rate moderation and improved equity valuations, encouraging long-term productive investment over short-term inflation hedging.
CPPE concluded that Nigeria’s January 2026 inflation figures mark a meaningful transition toward macroeconomic stabilisation, driven mainly by declining food prices and supported by easing core inflation.
The group said consolidating disinflation while protecting agricultural productivity and rural livelihoods will be critical to transforming current price moderation into durable stability, inclusive growth and improved investor confidence.
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