Nigeria’s Disinflation Trend Opens 2026 Economic Window, but Structural Risks Persist
By Darasimi Kikelomo
Nigeria’s recent slowdown in inflation has opened a narrow but critical economic window for policymakers, businesses, and households entering 2026, although economists caution that the gains remain fragile and highly dependent on sustained reforms.
According to an analysis published by BusinessDay on 7 January 2026, Nigeria’s inflation trajectory has begun to moderate after several years of relentless price increases that eroded purchasing power and weakened consumer demand. The easing trend has been attributed to tighter monetary policy, relative foreign exchange stability, and a gradual softening in food inflation.
However, analysts quoted in the report warned that Nigeria’s disinflation is not yet structural. Key cost drivers such as energy prices, logistics bottlenecks, insecurity in food-producing regions, and fiscal pressures remain unresolved.
Economic analysts note that while headline inflation has slowed, core inflation, which strips out volatile food and energy prices, continues to reflect deep-rooted inefficiencies in the economy.
“This is not a victory lap moment,” one economist told BusinessDay. “It is an opportunity window, and those windows close very quickly if fiscal discipline weakens or FX pressures resurface.”
Businesses are cautiously optimistic, particularly manufacturers and import-dependent firms that suffered under extreme price volatility in recent years. Several operators say improved price stability could help restore medium-term planning, pricing confidence, and inventory management.
However, economists stressed that sustaining the disinflation trend will depend on continued coordination between the Central Bank of Nigeria and fiscal authorities, improved oil output, disciplined public spending, and credible revenue mobilisation.
Failure in any of these areas, analysts warn, could quickly reverse the gains, returning Nigeria to a high-inflation environment with damaging consequences for growth, employment, and social stability.
