why food prices keep rising in nigeria understanding inflation in 2026

Headline inflation in Nigeria dropped to 15.15 percent in December 2025, according to the Central Bank of Nigeria. However, household budgets remain…

The Central Bank of Nigeria (CBN) has reported a 15.15 percent reduction in headline inflation in December 2025, marking a decrease from the 15.47 percent recorded in November. Household budgets continue to be stretched however, due to the food items' share of disposable income. The cost pressure is different among citizens in different States because of different structural factors. Data from the National Bureau of Statistics (NBS) highlights the effect of certain factors on the cost of living in the various regions of the country. To grasp these dynamics, one needs to consider the supply chain delays, agricultural input costs, and the nature of the currency in question.

So, what is causing food inflation in Nigeria?

Food inflation is not a universal macroeconomic phenomenon, because of difficulties of production and transport faced in a local area. The [CBN Economic Report](https://www.cbn.gov.ng/Out/2025/RSD/Second%20Quarter%202025%20Economic%20Report.pdf) indicates that food inflation increased to 21.97 percent in the second quarter of 2025, compared to 21.79 percent in the first quarter. This pressure comes from the cost of inputs to farmers such as high priced seedlings, high cost of fertilisers and high cost of pesticides. Moreover, pass-through of exchange rate variations increases the costs of agricultural imports and agricultural machinery.

What is the effect of security issues on agricultural production?

Insecurity in the major food producing areas directly affects planting and harvesting season in the country. Armed conflicts and rural violence hamper farmers' access to their fields, resulting in lower crop yields and grain availability in key markets. Wholesale and retail prices of basic commodities go up when there is a deficit supply. The Central Bank of Nigeria (CBN) says the regionally uneven distribution accentuates these outcomes, with prices in the regions with heightened security challenges being substantially higher than in agricultural peaceful zones.

What is the importance of logistics costs and transport costs?

Retail food prices are marked up by a considerable amount before goods reach urban centres, with logistics costs accounting for the significant mark-up. Inadequate roads and high fuel costs add extra expense to transporting harvests from rural farms to city markets. These operating costs are passed on to traders who then hike up the cost to consumers. Moreover, the increased cost of imported foodstuffs due to port clearance delays and handling fees further add to household costs.

What is the impact of monetary policy on prices for consumers?

Monetary tightening measures by the financial authorities are to be used to stabilize the local currency and to reduce the price rise in the economy as a whole. These measures were effective in bringing headline inflation down from 34.80 percent in December 2024 to 15.15 percent by the end of 2025, but structural food rigidities take a long time to react to interest rate changes. The high cost of commercial credit for agricultural enterprises prevents large investments in agriculture and slows down the production recovery.

Conclusion

Household nutrition is facing ongoing cost pressures due to agriculture insecurity issues, high agricultural input costs, and transportation problems. Monetary policy instruments reduce overall economic volatility, but specific security in rural areas and/or supply chain infrastructure interventions are still needed for stable food markets. Fixing these structural flaws will be the key to whether or not future price stability will benefit end consumers.

FAQ 

•  Which helped to drive up food inflation in early 2025?
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The high price of farm inputs, transportation delays, and the exchange-rate pass-through effects contributed to driving food inflation to 26.08 per cent in January 2025.

 What was the total decrease in headline inflation at the end of 2025?

The headline inflation rate fell from 34.80 percent in December 2024 to 15.15 percent in December 2025.

 What makes the prices of food vary from state to state?

Regional security concerns and local transport difficulties cause very significant price differences, with some states having very much higher inflation than others.

 Which farming inputs are most responsible for the high costs of agriculture?

The high cost of seedlings, chemical fertilizer, pesticides and energy are some of the significant cost factors for Nigerian agricultural producers.

 Does monetary policy directly reduce the price of food?

Food prices are more dependent on physical security, crop production and transport arrangements than other macroeconomic inflation, which is determined by monetary policy.

 Here are some more frequently asked questions:

 How does the National Bureau of Statistics measure price changes?

The price reference year of the Consumer Price Index (CPI) used to record price changes are from the year 2024 and the weight reference period is 2023. The detailed breakdowns of the CPI are available in the [NBS CPI catalogue](https://microdata.nigerianstat.gov.ng/index.php/catalog/154) and are divided into 934 product varieties for a total of 13 divisions. This framework independently measures the imported food, farm produce, energy and urban versus rural measures.

 What was the performance of food inflation in the middle of 2025?

The food inflation was slightly higher in the second quarter of 2025 at 21.97 percent than its level in the first quarter of the year at 21.79 percent. This phenomenon, as seen in the tracked data with the [Central Bank of Nigeria](http://www.cbn.gov.ng/MonetaryPolicy/Activities.html), also reflected the strength of food-specific price pressures amid the overall disinflationary economic environment.

What are the reasons why rates of inflation vary so widely among regions in the states?

The degree of market pricing is huge, due to structural constraints and local security conditions. The CBNEconomicReportQ2Q2025, for example, reported that Borno state had the highest headline inflation of 47.40 per cent while Zamfara state had the lowest of 9.90 per cent. Disruptions in security in agricultural belts have direct effects on local supply and lead to high price volatility in the area.

 What were the reasons given by the Central Bank for the price pressures in early 2025?

The Central Bank in its [January 2025 Economic Report](https://www.cbn.gov.ng/Out/2025/RSD/January%202025%20Economic%20Report.pdf) identified high cost of farm inputs including energy, seedlings and pesticides. Other factors were currency exchange-rate pass through effects, and high port and logistics costs.

What does the economy look like in 2026?

The Central Bank of Nigeria (CBN) anticipates that addressing the persistent structural rigidities in food and energy markets will continue to be key to maintaining macroeconomic stability.