Headline Inflation Eases Slightly but State-Level Rates Remain High
Despite a marginal decline in Nigeria's headline inflation rate in June 2026, 19 states and the Federal Capital Territory (FCT) recorded inflation rates exceeding 30%, according to the latest report from the National Bureau of Statistics (NBS). The national headline inflation rate stood at 34.19% in June, down from 34.42% in May 2026, marking a slight ease. However, the state-level data reveals a more nuanced picture, with many regions still grappling with severe price pressures.
States with Highest Inflation Rates
The NBS report highlighted that Kogi state recorded the highest inflation rate at 41.14%, followed by Bauchi (40.73%) and Oyo (39.91%). Other states with rates above 35% include Kwara (38.74%), Benue (37.58%), and Plateau (36.19%). The FCT, Abuja, also saw inflation of 31.45%, well above the national average. In contrast, the lowest inflation rates were recorded in Borno (23.47%), Taraba (24.37%), and Sokoto (24.49%).
Food Inflation Remains Stubbornly High
Food inflation, a key driver of overall inflation, also showed a slight decline to 40.87% in June from 41.21% in May. However, at the state level, food inflation exceeded 40% in 22 states. Kogi again topped the list with a food inflation rate of 49.84%, followed by Bauchi (47.89%) and Kwara (46.73%). The NBS attributed the high food prices to persistent supply chain disruptions, rising transportation costs, and insecurity in food-producing regions.
Core Inflation and Contributing Factors
Core inflation, which excludes volatile food and energy prices, moderated marginally to 28.10% in June from 28.25% in May. The NBS noted that the slight ease in headline inflation was driven by a combination of factors, including a relatively stable exchange rate in the parallel market and a slight improvement in fuel supply. However, analysts warn that the gains are fragile, as structural issues such as poor infrastructure, high energy costs, and security challenges continue to exert upward pressure on prices.
Economic Implications and Policy Response
The persistent high inflation, especially in states with rates above 30%, underscores the uneven impact of price pressures across Nigeria. The Central Bank of Nigeria (CBN) has maintained a tight monetary policy stance, with the Monetary Policy Rate (MPR) at 27.50%, to curb inflation. However, economists argue that monetary policy alone cannot address the supply-side constraints driving inflation. They call for coordinated fiscal measures, including investment in agriculture, improvement in transportation networks, and enhanced security to boost food production and distribution.
Outlook for Inflation in Coming Months
Looking ahead, the NBS expects inflation to remain elevated in the near term, driven by seasonal factors such as the planting season and potential flooding in some states. The report also highlights the impact of the recent removal of fuel subsidies and the depreciation of the naira, which continue to feed into consumer prices. The statistics office projects that headline inflation could hover between 33% and 35% in the third quarter of 2026 before gradually declining towards year-end, barring any major shocks.
