CPPE says food inflation remains a major threat to Nigerians welfare as inflation slows to 14.63% in September

Nigeria’s headline inflation rate eased to 14.63% in September 2026 from the 15.39 reading in August extending the country’s disinflation trend for a fourth consecutive month, according to the National Bureau of Statistics (NBS). According to NBS the latest figure represents a decline of 6.35 percentage points from the 20.98% recorded in September 2025. Month-on-month headline inflation also slowed to 0.06% in September from 0.71% in August, indicating a slower increase in average prices.

The NBS report showed mixed movements across urban and rural inflation, while food inflation declined on a month-on-month basis. Core inflation, however, increased compared with August. Urban inflation stood at 15.64% year-on-year in September 2026, while the corresponding twelve-month average was 15.90%. The annual rate was 12.58 percentage points lower than the 28.48% recorded in September 2025.

On a month-on-month basis, urban inflation rose to 0.53% in September from 0.28% in August, showing that price increases in urban areas accelerated during the month. Rural inflation, meanwhile, stood at 12.46% year-on-year, with its twelve-month average at 15.32%. The annual rate was 10.35 percentage points below the 25.67% recorded in September 2025. Month-on-month rural inflation fell to -0.89% in September from 1.79% in August.

The NBS reported a 2.68 percentage-point decline in the rural monthly inflation rate. The twelve-month average urban inflation rate fell by 12.58 percentage points year-on-year. The twelve-month average rural inflation rate declined by 10.35 percentage points over the same period. The figures show that while annual inflation moderated in both urban and rural areas, monthly price movements differed, with urban inflation accelerating and rural inflation recording a decline.

Meanwhile Centre for the Promotion of Private Enterprise (CPPE) has said that Food Inflation Remains a Major Threat to Household Welfare. Reacting to the September inflation report by NBS it said “Food inflation increased marginally from 19.57% in August to 19.59% in September, exceeding headline inflation by 4.96 percentage points.

“This divergence is economically significant. Food constitutes a disproportionately large share of expenditure among low-income households. Consequently, elevated food inflation erodes real incomes, deepens poverty risks and weakens household consumption.

“The implications extend beyond household welfare. As families allocate increasing proportions of their incomes to food, expenditure on manufactured products, education, healthcare and other services becomes constrained. This weakens effective demand and adversely affects businesses, especially consumer-facing enterprises.

“The persistence of food inflation reflects structural weaknesses in agricultural production and distribution, including insecurity, inadequate rural infrastructure, high logistics costs, post-harvest losses and inefficient market connectivity. Addressing these constraints requires targeted supply-side interventions rather than reliance predominantly on monetary tightening.

“One of the most significant warning signals is the acceleration in monthly energy inflation from 0.36% in August to 5.38% in September, an increase of 5.02 percentage points. Energy inflation on a year-on-year basis stood at 10.85%. 

“This is particularly concerning because energy is a critical input across virtually all sectors. Higher petrol, diesel and gas prices raise transportation, distribution and production costs, with potential secondary effects on food prices and core inflation.

“The geopolitical crisis in the Middle East has heightened global petroleum market volatility, exposing the Nigerian economy to external energy-price shocks. Exchange rate stability can moderate the transmission of imported inflation, but cannot fully neutralise rising international energy costs.

“The sharp monthly energy-price increase also raises the risk that the recent disinflationary gains could be reversed if higher energy costs persist. The policy priority should therefore be to strengthen domestic energy resilience through reliable electricity supply, expansion of CNG infrastructure, greater adoption of electric mobility and improved domestic refining efficiency.  A sustainable reduction in inflation requires lowering the economy’s structural dependence on expensive and volatile energy sources.

“The September report exposes substantial geographical differences in inflation. Urban inflation exceeded rural inflation by 3.18 percentage points, highlighting the relatively greater price pressures facing urban households. These disparities are consistent with differences in logistics costs, market access, local supply conditions and consumption patterns. 

“The policy implications are significant. Improved inter-state connectivity, rural feeder roads, storage facilities, agricultural market infrastructure and security would strengthen domestic supply chains and reduce avoidable distribution costs.  State and local governments have critical responsibilities in addressing these structural constraints.

“The inflation report offers both opportunities and risks for the private sector. The moderation in headline inflation improves the outlook for interest rates, financial planning and investment confidence. The Central Bank’s September reduction of the Monetary Policy Rate by 350 basis points to 23% provides an important foundation for further easing, although transmission to commercial lending rates may take time. 

“Lower financing costs would be particularly beneficial to capital-intensive enterprises, manufacturers, agricultural businesses and MSMEs. However, the inflation data also contain important cautionary signals. Although annual core inflation declined, monthly core inflation increased from -0.06% in August to 1.11% in September. This suggests that underlying price pressures have not been fully contained. 

“Businesses therefore face a mixed operating environment: improving macroeconomic predictability alongside continuing energy, logistics and consumer-demand pressures. Investors should distinguish between declining inflation and declining operating costs. The former improves the macroeconomic outlook; the latter is essential for stronger profitability, competitiveness and sustainable investment expansion.

“The September report strengthens the case for a more balanced inflation-management strategy. Monetary policy remains important for anchoring expectations and sustaining macroeconomic stability, but many of the remaining inflationary pressures are rooted in structural and supply-side constraints.

The CPPE recommends the following priorities: Sustain prudent monetary easing: Gradually reduce interest rates as inflation conditions permit, while safeguarding foreign exchange stability and containing inflation expectations. Prioritise food affordability by addressing insecurity in farming communities, agricultural productivity constraints, post-harvest losses and high food distribution costs.

“Accelerate electricity-sector reforms, expand CNG and alternative energy infrastructure, and promote efficient and competitive domestic petroleum markets. Recalibrate monetary and trade policies to ease supply-side challenges, especially in agriculture, agribusiness and manufacturing. Improve logistics efficiency: Invest in roads, storage, transport infrastructure and inter-state market connectivity, while eliminating multiple levies and checkpoints and Strengthen subnational accountability: Federal, state and local governments should coordinate reforms that lower production and distribution costs and improve market access.

“The September 2026 inflation report provides credible evidence of progress in macroeconomic stabilisation. Headline inflation declined by 76 basis points, while the monthly headline inflation rate fell from 0.71% to just 0.06%. Monthly food inflation also turned negative at -1.55%, providing some immediate relief to consumers. Nevertheless, the persistence of 19.59% annual food inflation, the sharp increase in monthly energy inflation and renewed monthly core inflation pressures demonstrate that the gains remain fragile.

“The policy challenge is therefore twofold: sustain disinflation through credible macroeconomic management and address the structural factors that keep production, energy, transportation and food costs elevated. This requires sustained collaboration among the federal, state and local governments, with greater emphasis on productivity, infrastructure, security, energy efficiency and domestic supply capacity.”

“This divergence is economically significant. Food constitutes a disproportionately large share of expenditure among low-income households. Consequently, elevated food inflation erodes real incomes, deepens poverty risks and weakens household consumption.

“The implications extend beyond household welfare. As families allocate increasing proportions of their incomes to food, expenditure on manufactured products, education, healthcare and other services becomes constrained. This weakens effective demand and adversely affects businesses, especially consumer-facing enterprises.

“The persistence of food inflation reflects structural weaknesses in agricultural production and distribution, including insecurity, inadequate rural infrastructure, high logistics costs, post-harvest losses and inefficient market connectivity. Addressing these constraints requires targeted supply-side interventions rather than reliance predominantly on monetary tightening.

“One of the most significant warning signals is the acceleration in monthly energy inflation from 0.36% in August to 5.38% in September, an increase of 5.02 percentage points. Energy inflation on a year-on-year basis stood at 10.85%. 

“This is particularly concerning because energy is a critical input across virtually all sectors. Higher petrol, diesel and gas prices raise transportation, distribution and production costs, with potential secondary effects on food prices and core inflation.

“The geopolitical crisis in the Middle East has heightened global petroleum market volatility, exposing the Nigerian economy to external energy-price shocks. Exchange rate stability can moderate the transmission of imported inflation, but cannot fully neutralise rising international energy costs.

“The sharp monthly energy-price increase also raises the risk that the recent disinflationary gains could be reversed if higher energy costs persist. The policy priority should therefore be to strengthen domestic energy resilience through reliable electricity supply, expansion of CNG infrastructure, greater adoption of electric mobility and improved domestic refining efficiency.  A sustainable reduction in inflation requires lowering the economy’s structural dependence on expensive and volatile energy sources.

“The September report exposes substantial geographical differences in inflation. Urban inflation exceeded rural inflation by 3.18 percentage points, highlighting the relatively greater price pressures facing urban households. These disparities are consistent with differences in logistics costs, market access, local supply conditions and consumption patterns. 

“The policy implications are significant. Improved inter-state connectivity, rural feeder roads, storage facilities, agricultural market infrastructure and security would strengthen domestic supply chains and reduce avoidable distribution costs.  State and local governments have critical responsibilities in addressing these structural constraints.

“The inflation report offers both opportunities and risks for the private sector. The moderation in headline inflation improves the outlook for interest rates, financial planning and investment confidence. The Central Bank’s September reduction of the Monetary Policy Rate by 350 basis points to 23% provides an important foundation for further easing, although transmission to commercial lending rates may take time. 

“Lower financing costs would be particularly beneficial to capital-intensive enterprises, manufacturers, agricultural businesses and MSMEs. However, the inflation data also contain important cautionary signals. Although annual core inflation declined, monthly core inflation increased from -0.06% in August to 1.11% in September. This suggests that underlying price pressures have not been fully contained. 

“Businesses therefore face a mixed operating environment: improving macroeconomic predictability alongside continuing energy, logistics and consumer-demand pressures. Investors should distinguish between declining inflation and declining operating costs. The former improves the macroeconomic outlook; the latter is essential for stronger profitability, competitiveness and sustainable investment expansion.

“The September report strengthens the case for a more balanced inflation-management strategy. Monetary policy remains important for anchoring expectations and sustaining macroeconomic stability, but many of the remaining inflationary pressures are rooted in structural and supply-side constraints.