Nigeria’s headline inflation rate is expected to continue easing in the coming months, although rising food prices remain a major source of pressure, according to analysts at Comercio Partners.
The outlook followed the latest inflation figures from the National Bureau of Statistics, which showed that headline inflation declined to 15.43 per cent year-on-year in July 2026, compared with 15.91 per cent in June.
The July figure represented the second straight monthly decline in headline inflation and the largest monthly moderation recorded so far this year. Analysts said the trend suggests that underlying price pressures across parts of the economy are beginning to weaken.
A key factor behind the improvement was the sharp decline in core inflation, which excludes some volatile items. Core inflation fell to 14.97 per cent in July, from 15.92 per cent in June, while the month-on-month rate dropped substantially to 0.15 per cent, compared with 1.66 per cent in the previous month.
Comercio Partners said the movement indicated weaker underlying inflationary pressure, supported in part by reduced exchange-rate volatility. The development could provide some relief for businesses and households facing higher costs, particularly in sectors that depend heavily on imported inputs.
Food prices, however, moved in the opposite direction. Food inflation increased to 20.31 per cent year-on-year in July, up from 17.52 per cent in June. On a monthly basis, food inflation also accelerated to 5.56 per cent, compared with 3.75 per cent in June.
The analysts linked the increase to constraints affecting agricultural supply, higher logistics and distribution expenses, seasonal influences and wider structural challenges within the food supply chain. They said these pressures are not issues that monetary policy can address on its own.
The divergence between food and core inflation is particularly relevant to household spending. Food represents a substantial portion of expenditure for many Nigerian households, making increases in food prices an important factor in the cost of living even when the overall inflation rate is declining.
Despite the increase in food inflation, several major expenditure categories recorded lower contributions to headline inflation during July. The contribution of food and non-alcoholic beverages declined from 6.37 percentage points in June to 6.18 percentage points in July.
Restaurants and accommodation also recorded a lower contribution, falling from 2.06 percentage points to 1.99 percentage points. Transport declined from 1.70 percentage points to 1.64 percentage points, while housing, utilities and fuels fell from 1.34 percentage points to 1.30 percentage points.
According to Comercio Partners, the combined decline in contributions from these four expenditure divisions represented about 75 per cent of the 0.48 percentage-point reduction in headline inflation recorded between June and July.
The figures also have implications for Nigeria’s housing and construction sectors. Housing-related costs are influenced by inflation through the prices of building materials, transportation, energy and other inputs, while higher living costs can affect households’ ability to save for home purchases, meet rent obligations and service mortgages.
For developers and construction companies, a sustained moderation in underlying inflation could improve cost forecasting and financial planning. However, continued food-price increases could keep pressure on household budgets and limit the amount of income available for housing and other long-term spending.
The July data therefore presents a mixed picture for the wider economy. While easing core inflation and reduced exchange-rate volatility point to moderating price pressures, persistent food inflation remains a significant challenge for households and businesses.
For the housing and infrastructure sectors, the direction of inflation will remain important because changes in prices affect construction costs, household purchasing power, project financing and the broader affordability of housing.
