Nigerian Food Inflation Hits 20.31% for a Sixth Month as Headline Rate Falls to 15.43%

Nigeria's macroeconomic indicators are improving almost across the board. Food prices are not.

Headline inflation eased to 15.43% in July from 15.91% in June, according to the National Bureau of Statistics — a second consecutive monthly decline and the lowest reading since March, down from a peak above 34% in 2024.

Food inflation accelerated for a sixth straight month, reaching 20.31% from 17.52% in June.

That divergence is the whole story. Food accounts for the largest share of household expenditure in Nigeria, particularly among lower-income households, which means the headline rate and the lived experience of inflation have been moving in opposite directions for half a year.

As BusinessDay noted of the same pattern, overall inflation may be stabilising while food prices rise faster again — and what remains after the one-off shocks of fuel subsidy removal and naira depreciation have faded are structural pressures that monetary policy cannot easily solve.

The rest of the picture is genuinely strong

The improvement elsewhere is not marginal.

Core inflation, which strips out volatile agricultural produce and energy prices, moderated for a second month to 14.97% from 15.92% — its lowest since May 2022. Monthly CPI growth slowed to 1.57% from 1.66%.

Several components softened: transportation to 15.5%, miscellaneous goods and services to 15.6% from 17.3%, restaurants and hotels to 21.8% from 23.6%, and clothing and footwear to 4% from 6.4%. Housing and utilities was the notable exception, rising to 12.6% from 11.2%.

On the external side, the naira firmed to around ₦1,346 to ₦1,349 per dollar in the official market in August, its strongest in roughly five months, with the parallel market premium narrowing. External reserves reached $52.66 billion by 19 August — a seventeen-year high, and an increase of more than $7 billion since the start of the year.

Real GDP grew 3.89% year on year in the first quarter, continuing a run of expansion led by the non-oil economy.

Policy is holding tight

The Central Bank of Nigeria has not eased into the improving numbers.

The Monetary Policy Committee has held its benchmark rate at 26.5% since February, having cut by 50 basis points from 27%, and maintained that stance at its 306th meeting on 20 and 21 July under Governor Olayemi Cardoso. The Cash Reserve Ratio for deposit money banks stands at 45%.

That is a restrictive stance by any recent Nigerian standard, and the food data explains why the committee has been reluctant to move further.

The CBN's own Macroeconomic Outlook, published in December, projected headline inflation averaging 12.94% in 2026 against 21.26% in 2025, driven by declining food and petrol prices, with reserves reaching $51.04 billion. Reserves have already exceeded that. Food prices have not cooperated.

What to watch

Whether food inflation peaks is the first question, and it is largely an agricultural and logistics question rather than a monetary one.

The second is the September MPC meeting. With core inflation at a four-year low and reserves at a seventeen-year high, the case for easing is building — and food prices are the argument against.

The third is the gap itself. A five-point spread between headline and food inflation is a political fact as much as an economic one.