Nigeria’s headline inflation rate fell for the second consecutive month in July 2026, but economists and financial analysts say Nigerians should not expect immediate relief from the high cost of living because food and other essential expenses remain elevated.
According to the Consumer Price Index, CPI, report released by the National Bureau of Statistics, NBS, on Monday, headline inflation declined from 15.91 percent in June to 15.43 percent in July 2026.
Month-on-month inflation also fell to 1.57 percent in July from 1.66 percent recorded in June.
However, the improvement in headline inflation has not translated into lower prices in markets. Instead, food inflation rose for the sixth consecutive month, reaching 20.31 percent from 17.52 percent.
The NBS attributed the increase to higher average prices of commodities including crayfish, fresh pepper, onions, carrots, rice, water yam, tomatoes, garri, plantain, beef, eggs, guinea corn, ginger and plantain flour.
At the state level, Adamawa recorded the highest food inflation at 51.36 percent, while Nasarawa recorded the lowest at 6.88 percent.
Why lower inflation does not mean cheaper food
Prof. Godwin Oyedokun, Professor of Accounting, said the latest decline in headline inflation could indicate improving macroeconomic stability, but warned that it should not be interpreted as a reduction in the cost of living.
He explained that disinflation means prices are increasing at a slower rate, rather than falling.
“Nigeria’s second consecutive decline in headline inflation to 15.43% in July is a positive sign of emerging macroeconomic stability, but it should not be mistaken for a fall in the cost of living,” Oyedokun told DAILY POST.
He attributed the recent moderation partly to exchange-rate stability, tight monetary policy, easing core inflation and favourable base effects.
However, he noted that food and other essential household expenses remain high, meaning many Nigerians have yet to feel the impact of the lower headline inflation rate.
“The challenge is that food prices and other essential household costs remain high. Many Nigerians are yet to feel the benefit of the lower inflation rate,” he said.
According to him, the real test will be whether the trend continues while food prices moderate, purchasing power improves and wages catch up with the elevated cost of living.
Economist puts Nigeria’s inflation higher than NBS figure
Dr Okechukwu Unegbu, former President of the Chartered Institute of Bankers of Nigeria, CIBN, argued that the official inflation figure does not fully reflect the experience of Nigerians in markets and other points of transaction.
Unegbu said he believed Nigeria’s actual inflation rate remained significantly higher, estimating it at between 35 and 40 percent.
“For me, the inflation that is dropping is neither here nor there. It doesn’t make sense to me,” he said.
He argued that a meaningful reduction in inflation should eventually be reflected in the prices consumers pay for everyday goods.
“If inflation drops in society, it will reflect on the general public,” he said, pointing to the continued high prices of basic food items.
Food, transport and energy remain major pressure points
Dr Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, CPPE, said the decline in headline inflation could be linked to sustained macroeconomic stability, particularly relative stability in the foreign exchange market.
He said exchange-rate stability had positively affected investment and investor confidence while helping to reduce inflation expectations.
However, Yusuf stressed that the high cost of living remains a major concern.
“The key drivers of the cost of living are still major pressure points as far as inflationary pressure is concerned,” he said.
He identified food, transportation, energy and utilities among the areas continuing to put pressure on households.
Yusuf said the impact was particularly severe for ordinary Nigerians, who remain vulnerable despite the recent moderation in headline inflation.
He called for stronger fiscal interventions by both federal and state governments to address food inflation, transportation costs, energy prices and utility expenses.
The latest figures therefore present a mixed picture for the Nigerian economy. While headline inflation is slowing, the continued rise in food inflation means households are still facing significant pressure from the prices of essential goods and services.
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