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By Merit Ibe
The Organised Private Sector (OPS) has said Nigeria’s continued disinflation offers relief to households and businesses but poses risks to farm incomes and rural economic stability.
Nigeria’s headline inflation eased to 15.10 per cent year-on-year in January 2026, down slightly from 15.15 per cent in December 2025, marking the tenth consecutive month of moderation in price pressures.
The Lagos Chamber of Commerce and Industry (LCCI) described the development as positive but fragile, noting that the slowdown is largely driven by temporary factors such as food price deceleration, exchange rate appreciation and relative stability in domestic energy prices, rather than deep structural reforms.
According to the chamber, improved post-harvest supply, easing festive demand, moderated imported inflation and stable PMS prices contributed to the decline. However, it cautioned that the economy remains vulnerable to inflationary shocks arising from food supply disruptions, climate variability, insecurity in farming regions, oil price volatility and renewed exchange rate pressures.
The OPS noted that while the current trend improves short-term price predictability and supports business planning, inflation remains elevated in real terms. High borrowing costs, compressed margins and macroeconomic uncertainty continue to limit long-term investment decisions.
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The chamber urged the government to prioritise supply-side reforms in agriculture, logistics, energy and foreign exchange transparency. It also called on monetary authorities to balance inflation control with growth considerations and advised the private sector to strengthen local sourcing, improve supply-chain efficiency and adopt disciplined pricing strategies.
Similarly, the Centre for the Promotion of Private Enterprise (CPPE) said the January inflation figures signal a meaningful shift toward macroeconomic stabilisation, driven largely by declining food prices and easing core inflation.
Chief Executive of CPPE, Muda Yusuf, noted that lower food prices improve household purchasing power, reduce poverty pressures and could stimulate recovery in retail trade, manufacturing and services if sustained.
However, he warned that persistent weakness in farm-gate prices could undermine farmers’ incomes, weaken rural purchasing power and discourage agricultural production, potentially leading to future supply shortages and renewed inflationary pressures.
He stressed the need to balance consumer affordability with producer sustainability to safeguard food security. Yusuf advised the government to adopt targeted measures such as productivity support, minimum guaranteed prices for selected crops, strategic reserves and expanded agro-processing capacity.
He added that the disinflation trend creates room for cautious, data-driven monetary easing, while investors should focus on opportunities in food systems, processing, storage, energy, manufacturing and infrastructure.
The OPS maintained that while the current inflation moderation supports short-term confidence, Nigeria must convert cyclical disinflation into structural price stability through productivity improvements, logistics efficiency and coordinated macroeconomic policies to achieve durable growth and stronger investor confidence.
