Nigeria’s inflation picture is showing mixed signals as headline inflation continues to slow while food prices rise at a much faster rate.
The National Bureau of Statistics (NBS) reported a 50-basis-point decline in headline inflation to 15.43 per cent in July. At the same time, food inflation climbed from 17.52 per cent to 20.31 per cent.
The latest figures suggest that the easing in overall inflation has not yet translated into lower food costs for households. Food remains one of the largest expenses for many families, making the increase a major concern for household purchasing power.
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Food inflation records sharp monthly increase
Food inflation also recorded a significant month-on-month increase in July.
The rate reached 5.56 per cent, compared with 3.75 per cent in June and 2.98 per cent in May. This marked the strongest monthly increase since the rebasing of the Consumer Price Index.
The year-on-year trend has also moved higher for six consecutive months. Food inflation started the year at 8.9 per cent but has since more than doubled.
The latest increase adds to concerns that food prices could remain a major source of pressure even as other parts of the inflation basket begin to stabilise.
Core inflation offers some relief
Core inflation provided a different picture in July.
The measure fell to 14.97 per cent, its lowest level since January 2025. The decline could support the Central Bank of Nigeria’s assessment that underlying price pressures are gradually becoming more stable.
The Monetary Policy Committee has maintained the Monetary Policy Rate between 26.5 and 27.5 per cent over the past year.
Money balances increased from N117.24 trillion to N133.25 trillion by June, representing year-on-year growth of 13.7 per cent. Private-sector credit also rose from N76.13 trillion to N83.26 trillion during the period.
The August inflation report will provide the MPC with newer data before its September meeting.
Transport costs add to food prices
High transport and energy costs remain important factors behind the food price increase.
Diesel prices have almost doubled since the end of February, according to the report. Diesel is widely used by logistics operators, making changes in its price important for the cost of moving agricultural goods.
Petrol prices have also increased by about 50 per cent since early March. Higher fuel costs can raise the cost of transporting food from farms to wholesale markets and then to consumers.
Insecurity in major food-producing areas has also created supply challenges. Economists, including Centre for Promotion of Private Enterprise Chief Executive Dr Muda Yusuf, have identified insecurity and logistics problems as structural issues affecting food prices.
Heavy rainfall may have added further pressure by making road transport and food distribution more difficult.
State inflation rates show wide gaps
The national inflation figure also hides major differences between states.
Adamawa recorded the highest headline inflation rate in July at 33.03 per cent. Yobe followed with 25.2 per cent, while Anambra recorded 24 per cent.
Nasarawa had the lowest headline inflation rate at 7.9 per cent. Kebbi and Borno followed with 9.1 per cent each.
Food inflation was particularly high in Adamawa, where it reached 51.4 per cent. Katsina recorded 30.8 per cent, while Zamfara posted 30.7 per cent.
The NBS has warned that state-level inflation figures should not be compared directly because household spending patterns vary across locations.
Housing costs face indirect pressure
The continuing rise in food prices also has wider implications for Nigeria’s housing sector.
When families spend more on food and transport, they have less money available for rent, mortgage payments, savings and home purchases. This can make housing affordability more difficult, especially for low- and middle-income households.
Developers also face higher operating costs when fuel, transport and other inputs become more expensive. These costs can affect construction budgets and, ultimately, the prices of new homes.
The July inflation figures therefore present a mixed outlook. While lower headline and core inflation point to improving price stability, rising food costs show that many Nigerians continue to face strong pressure on their household budgets.
