The recently published Consumer Price Index (CPI) report by the Nigeria Bureau of Statistics (NBS) yesterday shows that the Nigerian headline inflation moderated slightly by 5 basis points to 15.10% year-on-year in January 2026, down from 15.15% in December 2025. It's worth noting that in December, the NBS updated its inflation framework. The new methodology uses the average CPI for the entire 2024 year as the reference base, rather than a single prior month. This smooths out base distortions and prevents artificial YoY spikes. Consequently, the small change in headline YoY between December and January partly reflects methodological stabilisation rather than a genuine slowdown or rigidity in actual price movements.

The macroeconomic landscape in Q2 2026 reflects a transition from aggressive stabilization to economic consolidation. The Central Bank of Nigeria (CBN) recently executed a 50 basis-point rate cut, lowering the MPR from 27.00% to 26.50%. This signals growing confidence from the MPC regarding foreign exchange stability and foreign portfolio inflows.
However, despite the MPR cut, lending rates to the real sector remain heavily elevated due to structural rigidities, notably the Cash Reserve Ratio (CRR) which remains pegged at a restrictive 45% for commercial banks. Concurrently, headline inflation saw a slight uptick to 15.69% in April 2026 (up from 15.38% in March), primarily driven by food inflation (16.06%) stemming from logistics costs and insecurity in food-producing regions. While the Ministry of Finance anticipates the rate cut will lower government borrowing costs and increase infrastructure spending, we advise clients that consumer purchasing power will remain constrained in the near term until energy and food bottlenecks are structurally resolved.