Food inflation spikes to 20.31% as headline inflation eases to 15.43% in July

The National Bureau of Statistics says food inflation jumped to 20.31% in July even as headline inflation fell 50 basis points to 15.43%. The July Consumer Price Index report released yesterday shows household costs remain under severe pressure despite the slower headline figure.

Headline inflation has fallen consistently since June. But food inflation, the most impactful category for ordinary citizens, rose sharply from 17.52% to 20.31%, the highest level since last year's August. The increase mirrors renewed squeeze on household income and overstretches fixed-income earners.

Core inflation eases, MPR stays tight

Core inflation stood at 14.97%, its lowest since January 2025. That stable run may ease pressure on the monetary policy authority, which has been torn between fighting stubborn inflation and supporting nascent economic growth.

The Monetary Policy Committee has kept the MPR at between 26.5% and 27.5% in the past year. Money supply growth as of June remained moderate at 13.7%, rising from N117.24 trillion to N133.25 trillion. Credit to the private sector grew from N76.13 trillion to N83.26 trillion as at June, staying at single digit.

July's core inflation figure strengthens the perception that disinflation is consolidating. August CPI data will give the MPC more current information ahead of its September meeting.

Food inflation momentum remains strong

The month-on-month change in food inflation hit 5.56% in July, the highest post-CPI rebasing figure. It was 3.75% in June and 2.98% in May. Year-on-year, food inflation has grown consecutively for six months, more than doubling January's 8.9% rate. July added 2.79 percentage points to take the figure to 20.31%.

Dr Muda Yusuf, Chief Executive of the Centre for Promotion of Private Enterprise, and other economists argue the drivers are structural. Insecurity and logistics challenges require fiscal interventions. Agricultural stakeholders also warned that the Federal Government-led food import programme would disincentivise local production and set back investment in farming.

Regional disparities and rising transport costs

The July CPI report shows wide gaps across states. Adamawa recorded 33.03% headline inflation, over twice the national figure. Yobe and Anambra posted 25.2% and 24% respectively. At the bottom, Nasarawa, Kebbi and Borno recorded 7.9%, 9.1% and 9.1%.

Borno had negative food inflation, reflecting its status as a food basket state where transport adds little to final prices. Food inflation in Nasarawa and Kebbi was 6.9% and 12.5% for similar reasons. Logistics costs, driven by diesel and petrol prices, remain central to the food price problem.

Diesel prices have almost doubled since the end of February when the U.S.-Iranian conflict started. Premium motor spirit prices have increased by about 50% since early March. Heavy rainfall from June also affected haulage, while seasonal harvest entry may ease prices moderately in coming months.

For Nigerian households, the food inflation divergence means the cost of meals remains under pressure despite the slower headline print. Until insecurity and logistics challenges are addressed, high food prices may continue to bite.