CPPE Raises Alarm Over Farmer Sustainability Amid Nigeria's Food Inflation Decline
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has expressed significant concerns regarding the sustainability of farmers' incomes despite Nigeria's remarkable drop in food inflation to single-digit levels. This development comes as the National Bureau of Statistics (NBS) released data showing headline inflation declining to 15.1% in January 2026, with food inflation experiencing a dramatic fall to 8.89% year-on-year from 29.63% in December 2025.
Understanding the Disinflation Trend
Dr Yusuf characterized this economic shift as "real disinflation" rather than temporary price volatility, indicating a fundamental change in Nigeria's macroeconomic landscape. The broad-based price easing extends beyond food items to encompass various components of the consumer basket, suggesting a meaningful step toward macroeconomic stabilization that carries substantial implications for household welfare, monetary policy direction, agricultural sustainability, and private-sector investment decisions.
The welfare benefits of this disinflation trend are particularly significant given that food accounts for the largest share of household spending in Nigeria. Lower food prices are expected to improve purchasing power, especially among low-income households, reduce food-security concerns, and support a rebound in consumer demand for non-food goods and services. If this trend continues, it could stimulate retail trade, manufacturing capacity utilization, and service-sector growth throughout the Nigerian economy.
Critical Concerns for Agricultural Sector
Despite the positive outlook for consumers, Dr Yusuf issued a stark warning about the potential negative consequences for agricultural producers. He cautioned that prolonged declines in farm-gate prices could significantly weaken farmers' revenues and investment capacity, undermine rural purchasing power, and ultimately discourage agricultural production. This scenario, he emphasized, could eventually lead to supply shortages and renewed inflationary pressures that would reverse the current gains.
"There is a critical need to balance consumer affordability with producer sustainability to safeguard national food security," Dr Yusuf stressed, highlighting the delicate equilibrium required between consumer benefits and agricultural viability. He urged the government to implement targeted measures to protect farm incomes while maintaining affordability, suggesting specific interventions including:
- Productivity support programs for agricultural workers
- Minimum guaranteed prices for selected staple crops
- Strategic food reserves to stabilize market fluctuations
- Expanded agro-processing capacity to add value to agricultural products
Monetary Policy Implications and Economic Opportunities
Regarding monetary policy, Dr Yusuf noted that the disinflation trend provides room for cautious and gradual easing, though he emphasized that decisions should remain data-driven, particularly given that core inflation and the 12-month average inflation rate remain elevated. The easing inflation, especially in food prices, signals gradual recovery in real household demand and could create significant opportunities across multiple sectors including consumer goods, retail, logistics, and services.
Sustained disinflation may support gradual interest-rate moderation and improved equity market valuations, encouraging long-term productive investment over short-term inflation hedging. However, Dr Yusuf stressed that consolidating these gains while protecting agricultural productivity and rural livelihoods will be critical for achieving durable and inclusive growth throughout Nigeria's economy.
Regional Disparities and Contributing Factors
The January 2026 figures represent Nigeria's lowest food inflation rate in a decade, with government policies and a stronger naira contributing to reduced staple food prices nationwide. However, state-by-state analysis revealed significant regional disparities in food inflation rates across Nigeria, indicating that the benefits and challenges of this economic shift are not uniformly distributed throughout the country.
As Nigeria navigates this complex economic landscape, the CPPE's warnings highlight the need for balanced policy approaches that address both consumer relief and agricultural sustainability to ensure long-term food security and economic stability for all Nigerians.
