September 2026, Edition 3
According to the National Bureau of Statistics (NBS) Consumer Price Index (CPI) Report for August 2026, Nigeria’s inflation picture strengthened modestly, with headline and core measures pointing to a broader easing in price momentum. Headline inflation declined marginally to 15.39% year-on-year (YoY) in August 2026, from 15.43% in July, and was significantly lower than the 23.14% recorded in August 2025. More notably, headline inflation slowed to 0.71% month-on-month (MoM) from 1.57% in July, indicating a substantial moderation in the pace of monthly price increases.
The distinction between disinflation and deflation remains important: prices are still rising, but more slowly. The CPI index itself increased to 146.3 from 145.3, confirming that the overall price level continued to climb during the month. The twelve-month average inflation rate also eased to 16.30%, from 28.32% a year earlier.
Food inflation recorded one of the clearest improvements. Annual food inflation declined to 19.57%, from 25.30% a year earlier, while MoM food inflation plunged to 1.02% from 5.56% in July. The moderation reflected lower average prices for a range of food products, including palm oil, vegetables, tubers, grains, meat and fish.
Core inflation, which excludes farm produce and energy, also eased significantly to 13.29% YoY, compared with 22.93% in August 2025. Monthly, core inflation moved into marginal deflation at -0.06%, against 0.15% in July. This suggests that the August moderation was not confined entirely to food and agricultural prices and provides a stronger indication of easing underlying price pressures.
Indicator | August 2026 | July 2026 | Signal |
Headline inflation YoY | 15.39% | 15.43% | Marginal easing |
Headline inflation MoM | 0.71% | 1.57% | Strong moderation |
Food inflation YoY | 19.57% | 25.30%* | Lower annual pressure |
Food inflation MoM | 1.02% | 5.56% | Sharp moderation |
Core inflation YoY | 13.29% | 22.93%* | Significant easing |
Core inflation MoM | -0.06% | 0.15% | Marginal monthly deflation |
12-month average | 16.30% | 28.32%* | Sustained disinflation |
*Comparison with August 2025.
The national moderation masks important differences across locations. Urban MoM inflation fell to 0.28% from 1.90%, while rural inflation accelerated to 1.79% from 0.78%. On a YoY basis, urban inflation remained higher at 15.88%, compared with 14.23% in rural areas.
Food also remains the dominant source of inflationary pressure, with Food and Non-Alcoholic Beverages contributing +6.16 percentage points to the headline rate. Other major contributors were Restaurants and Accommodation Services (+1.99%), Transport (+1.64%), Housing, Water, Electricity, Gas and Other Fuels (+1.30%), and Education Services (+0.95%).
State-level outcomes remain highly divergent. Annual all-items inflation was highest in Lagos (23.68%), Zamfara (22.56%) and Enugu (22.06%), while monthly inflation was strongest in Rivers (6.92%), Osun (5.61%) and Kano (5.59%). Food inflation remained particularly elevated in Adamawa (38.85%), Zamfara (37.96%) and Bayelsa (36.20%), underscoring the uneven transmission of food-price pressures across the country.
August’s CPI data strengthen the case that Nigeria has entered a more pronounced disinflationary phase, although the sustainability of the trend remains dependent on food supply, exchange-rate stability, energy and transport costs, and domestic demand. The sharp moderation in MoM food inflation and the move in core inflation into negative territory are particularly significant because they suggest that price pressures may be broadening less aggressively than earlier in the year.
For monetary policy, the data provide greater room for policy normalisation over time, but not necessarily an immediate easing cycle. With headline inflation still at 15.39% and food inflation close to 20%, policymakers are likely to remain sensitive to the persistence of inflation expectations and liquidity conditions.
The August inflation release is mildly supportive of the FGN fixed-income secondary market, particularly the belly and longer end of the curve. The sharp slowdown in monthly inflation and softer annual headline and core readings could reinforce expectations of a gradually less restrictive monetary-policy environment, supporting demand for existing FGN bonds and creating scope for bond prices to rise while yields ease.
However, the transmission is unlikely to be immediate or broad-based. Elevated food inflation, ongoing liquidity management and the CBN’s monetary-policy operations remain critical determinants of market pricing. Consequently, the near-term secondary market is likely to remain reactive, with selective buying interest and pockets of duration demand rather than a broad-based rally.
August CPI provides a stronger disinflationary signal, but not yet a clean victory over inflation. The critical market question is whether the sharp moderation in monthly price pressures can persist into subsequent releases.
