Nigeria's inflation rate has continued its downward trend, dropping to 15.39% year-on-year in August 2026, from 15.43% in July, according to data released by the National Bureau of Statistics (NBS) on September 15. This marks the third consecutive month of decline in inflation. The month-on-month measure of inflation also fell sharply to 0.71% from 1.57% in July. The decline in inflation is attributed to easing food prices, greater exchange-rate stability, and softer underlying price pressures.
The moderation in inflation is becoming broader, moving beyond the earlier pattern where declines were driven predominantly by softer core inflation. Coronation Research noted that the August data showed simultaneous moderation in both food and core inflation, suggesting that pressures from both supply-side factors and underlying price dynamics were easing. Improved harvest conditions, relative stability in the foreign exchange market, and weaker underlying price pressures supported the slowdown.
Food inflation, which had remained a major source of pressure on Nigerian households, fell to 19.57% year-on-year in August, from 20.31% in July. On a month-on-month basis, food inflation plunged to 1.02%, compared with 5.56% in July. This decline represents the first moderation in annual food inflation recorded in 2026, according to Coronation Research. The improvement is largely attributed to better food supply associated with the harvest season.
The decline in food inflation is significant, as food prices remain a critical component of household expenditure, particularly among low- and middle-income families. Any sustained reduction in food-price pressures could have a more visible impact on household purchasing power. The concentration of price moderation among agricultural and perishable products points to an easing of supply-side constraints rather than merely a statistical effect.
Core inflation, which excludes volatile agricultural produce and energy-related items, declined sharply to 13.29% in August, from 14.97% in July. The 168-basis-point decline represents a substantial moderation in underlying inflationary pressure. Favourable base effects contributed significantly to the decline, particularly because the corresponding period used for comparison had relatively elevated inflation.
Despite the decline in inflation, the year-on-year food inflation rate remains substantially above the headline rate, underscoring the extent of accumulated food-price increases over the preceding period. The sharp moderation in monthly food inflation provides an important indication that the seasonal improvement in food supply is beginning to filter through to consumer prices.
The sustainability of the disinflation process will increasingly depend on whether favourable monthly price trends persist as the impact of base effects gradually diminishes. Exchange-rate stability, alongside improved food supply and softer underlying pressures, will be critical in supporting the disinflation trend. A stable naira reduces the pace at which imported input costs are transmitted into domestic prices, particularly for businesses that rely on imported raw materials.
Key points
- Nigeria's inflation rate decreased to 15.39% in August, driven by easing food prices and exchange-rate stability.
- Food inflation fell to 19.57% year-on-year in August, from 20.31% in July.
- Core inflation declined sharply to 13.29% in August, from 14.97% in July.
