Nigeria’s headline inflation rate moderated to 14.63% on a year-on-year basis in September 2026, down from 15.10% recorded in August, providing some relief to households and businesses grappling with elevated consumer prices. Data released by the National Bureau of Statistics (NBS) indicated a noticeable slowdown in the pace of price increases, particularly driven by a deceleration in food inflation.
The latest Consumer Price Index (CPI) report, which measures changes in the prices of goods and services, revealed that while prices remained high, the monthly inflation rate also registered a decline, falling to 1.15% in September from 1.30% in August. This suggests that the month-on-month increase in the cost of living was less aggressive than in previous periods.
A significant finding from the NBS analysis highlighted stark regional disparities in the cost of living. Several northern states emerged as the most affordable places to live, recording some of the country’s lowest inflation rates. Sokoto, Borno, and Katsina states registered the lowest year-on-year inflation rates at 12.87%, 13.05%, and 13.18% respectively, primarily due to easing food prices and stable local supply chains.
Conversely, the Federal Capital Territory (FCT), Lagos, and Rivers states continued to experience higher inflation, with rates of 16.52%, 16.20%, and 15.98% respectively. These urban centres typically face higher demand-pull inflation, increased transport costs, and greater exposure to imported inflation.
Food Prices Drive Inflation Moderation Amidst Regional Disparities
The NBS attributed the overall decline in the headline inflation primarily to the base effect from the previous year and a significant moderation in food inflation. Food inflation, a major component of the CPI, decreased to 16.85% year-on-year in September 2026, down from 17.50% in August. This reduction was largely due to the seasonal harvests improving the supply of staple food items such as rice, yam, and maize in agricultural-rich regions, especially across northern Nigeria.
However, the core inflation rate, which excludes the prices of volatile agricultural produce, remained sticky, inching down slightly to 12.98% in September from 13.15% in August. This indicates that while food prices are easing, underlying structural factors and demand pressures continue to influence non-food item prices, including housing, utilities, transport, and healthcare. The persistent high cost of fuel and electricity across the country continues to exert upward pressure on production and transportation costs for businesses, feeding into core inflation.
The Central Bank of Nigeria (CBN) has maintained a hawkish monetary policy stance throughout 2025 and 2026, consistently raising the Monetary Policy Rate (MPR) in efforts to tame persistent inflation. The moderation observed in September could be seen as an early indicator that these tightening measures are beginning to have an impact, albeit with a lag. However, analysts suggest that further sustained declines will be necessary before the CBN considers any significant shift in its policy approach.
For businesses, particularly Small and Medium-sized Enterprises (SMEs), operating in states with lower inflation presents a relative advantage. Reduced input costs and more stable consumer spending power in these regions can foster a more predictable operating environment. However, the overall national inflation rate, while declining, remains above the CBN’s single-digit target range, suggesting that the purchasing power of the naira is still under considerable strain for the majority of Nigerians.
The economic outlook for the coming months will heavily depend on the stability of the naira in the foreign exchange market, further improvements in local food production, and the effectiveness of government policies aimed at addressing supply-side constraints. The NBS typically releases the subsequent month’s CPI report around the middle of the following month, offering further insight into Nigeria’s inflationary trajectory.
Explore more Money stories and analysis from Business Elites Africa.
