Urban households gained measurable relief at the till as headline inflation eased to 15.39% in August from 15.43% in July, but many rural areas and several states continued to see prices rise.
The August print marked a third consecutive monthly decline, and the slowdown was broad based. Food inflation slowed to 19.57% from 20.31% in July, core inflation fell to 13.29% from 14.97%, and month-on-month inflation dropped to 0.71% from 1.57% (8.86% annualised). Monthly food inflation slowed to 1.02% from 5.56%, while monthly core inflation moved to -0.06% from 0.15%.
The moderation reflected three forces. Harvest-season dynamics reduced the speed at which staple prices rose, producing notable year-on-year drops in common items: Irish potatoes from ₦89,000 to ₦75,000, long-grain rice from ₦87,000 to ₦66,000, 50kg flour from ₦64,000 to ₦54,000, cassava flour (garri) from ₦32,000 to ₦20,000, and palm oil from ₦12,000 to ₦10,500. A stronger naira on the parallel market also eased import costs, with the rate averaging ₦1,549/$ in August 2025 and ₦1,418/$ in August 2026, an 8.46% appreciation. A favourable base-year comparison added further downward pressure on the annual rate.
Despite the national improvement, the picture varied sharply by location. Urban inflation eased to 15.88% from 16.12%, while rural inflation rose to 14.23% from 13.77%. Monthly rural inflation accelerated to 1.79% from 0.78%, whereas urban monthly inflation fell to 0.28% from 1.90%. State-level dispersion was wide: Lagos recorded 23.68%, Zamfara 22.56% and Enugu 22.06%, while Sokoto, Kebbi and Jigawa were at 2.11%, 3.72% and 3.81% respectively. Food inflation ranged from 38.85% in Adamawa to -4.04% in Borno.
For households, the thaw is real but partial: staples are rising more slowly in many markets, yet prices remain well above last year and some regions face sharper food-cost inflation. For investors, lower core and monthly inflation reduce near-term input and exchange-rate uncertainty, improving the operating backdrop but not constituting a policy pivot. The Monetary Policy Committee is expected to hold the monetary policy rate at 26.5% at its September 21-22 meeting, signalling that the central bank may wait for more sustained disinflation before cutting rates.
The key question is persistence. If month-on-month and core measures keep easing in the months ahead, budgets and corporate planning will become more predictable. If energy, distribution bottlenecks or local supply shocks reverse the trend, the national figure could quickly conceal renewed pressure in particular states and rural areas.
