•Month-on-month food inflation drops by 2.57 percentage points to -1.55%.
••Naira trades at N1,333 per dollar ahead of NBS official release
Nigeria’s headline inflation rate eased to 14.63% in September 2026, marking the fourth consecutive month of decline this year, according to the latest report from the National Bureau of Statistics (NBS).
The figure represents a significant drop from the 15.39% recorded in August and a sharp 6.35 percentage point decrease from the 20.98% seen in September 2025. On a month-on-month basis, headline inflation slowed to 0.06% in September, down from 0.71% in August, signaling a substantial cooling in the pace of price increases across the federation.
Despite the positive headline trend, the NBS report highlighted a divergence between urban and rural price movements, alongside a notable split between falling food costs and rising core inflationary pressures.
Urban and Rural Divergence
Urban inflation stood at 15.64% year-on-year in September 2026—a 12.58 percentage point drop from the 28.48% recorded the previous year. However, on a monthly basis, urban price pressures actually accelerated, rising to 0.53% in September compared to 0.28% in August.
In contrast, rural areas saw a more pronounced cooling. Rural inflation stood at 12.46% year-on-year, down from 25.67% in September 2025. Most notably, month-on-month rural inflation plunged into negative territory at -0.89%, down from 1.79% in August. This 2.68 percentage point decline suggests that the cost of living in rural communities actually decreased during the month.
Food Prices Tumble as Core Inflation Rebounds
The primary driver of the cooling headline rate was a significant drop in food costs. Year-on-year food inflation fell to 19.59% in September 2026, compared to 20.16% in the same period last year.
On a month-on-month basis, food inflation saw a dramatic reversal, falling to -1.55% from 1.02% in August. The NBS attributed this decline to price reductions in essential staples, including grains, rice, eggs, onions, palm oil, and various vegetables such as potatoes and tomatoes.
However, “Core Inflation”—which excludes volatile agricultural produce and energy prices—told a different story. While the annual core rate dropped to 12.95% from 22.11% last year, the monthly trend showed renewed pressure. Month-on-month core inflation rose to 1.11% in September, rebounding from a slight deflation of -0.06% in August. This suggests that while food is becoming cheaper, the cost of services and manufactured goods is beginning to climb again.
Naira Strengthens Amid Economic Data
The release of the inflation report follows a period of relative gains for the local currency. Market data shows the Naira strengthened to N1,333 per dollar at the Nigerian Foreign Exchange Market (NFEM) on October 14, 2026.
Investors and market participants had been closely monitoring the currency’s performance in anticipation of the NBS data, which serves as a critical barometer for the Central Bank’s future monetary policy decisions.
With four months of consistent disinflation, analysts suggest the government’s current economic stabilizers may be taking hold, though the rise in monthly core inflation remains a point of concern for policymakers.
