Food Prices, FX Stability Drive Nigeria November Inflation Below Budget Target of 15%

The recently released CPI data by the National Bureau of Statistics (NBS) indicated that Nigeria’s inflation maintained its disinflationary path, moderating to 14.45% year-on-year (YoY) in November vs 16.05% in the prior month.

This marked the eighth consecutive month of decline for Nigeria’s headline inflation and the lowest reading in five years.

The slowdown reflects the combined impact of stronger agricultural harvests, tighter monetary policy by the Central Bank of Nigeria (CBN), and improved foreign exchange (FX) stability.

It was also below the 2026 budget target of 15%.

This moderation was largely skewed to the food basket, which settled at 11.08% YoY, compared to 13.12% observed in October, possibly linked to the spillover effect of the harvest season, which improved food supply.

Similarly, the core basket printed lower at 18.04% (vs 18.69% in the prior month), as gas prices moderated and FX remained broadly stable.

On a month on month (MoM) basis, headline inflation scaled by 1.22% vs 0.93% recorded in the prior month, as expected, linked to frontloading activities due to festive-induced demands, mainly for food items.

This highlights that prices are still rising at the consumer level, albeit at a slower annual rate.

This MoM increase is mostly linked to seasonal demand pressures associated with the festive period and price hikes in specific staples like tomatoes, eggs, and onions.

For the coming period, analysts scope for headline print to halt its disinflation temporarily.

The 14.45% reading is the mildest since October 2020, providing a sharp contrast to the high of almost 35% recorded in December 2024 before the base year was revised

For context, the new base year of 2024 that was introduced has created a very low base, which we could temporarily translate to a marked increase in headline print in December 2025, before normalising from January 2026, according to analysts at Cardinal Stone Partners.

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