Naira Stability, Improved Food Supply Key to Inflation Slowdown, Says Expert

Economic analysts have identified exchange rate stability and improved food supply conditions as the major factors driving the recent moderation in Nigeria’s inflation rate, offering cautious optimism that price pressures may ease further in the coming months.

According to economic experts, the relative stability of the naira in the foreign exchange market has helped reduce the cost of imported goods and raw materials, limiting the pass-through of exchange rate volatility to consumer prices. This development, they say, has played a critical role in slowing the pace of inflation after months of sharp increases. An economist and financial analyst noted that when the naira remains stable, businesses are better able to plan, while importers avoid frequent price adjustments. “Exchange rate stability reduces uncertainty and helps tame cost-push inflation, especially in an import-dependent economy like Nigeria,” the expert explained. In addition to currency stability, food supply improvements have been highlighted as another major driver of the easing inflation trend. Recent harvests, seasonal supply increases, and government interventions in agricultural production and distribution have contributed to slower growth in food prices — a key component of Nigeria’s inflation basket. Food inflation has been one of the most persistent contributors to headline inflation, largely due to insecurity in farming communities, high transportation costs, and supply chain disruptions. However, analysts say better access to farms, increased output of staple crops, and targeted market interventions are beginning to yield results. Despite the positive signals, experts caution that inflation remains high, and the impact of easing prices is yet to be fully felt by many households. They warned that any renewed pressure on the naira or disruption to food production could quickly reverse recent gains. Analysts therefore urged authorities to sustain foreign exchange reforms, support local food production, and address structural challenges such as insecurity, logistics costs, and energy prices to consolidate progress. They stressed that maintaining naira stability and ensuring steady food supply will be crucial to achieving long-term price stability and easing the cost-of-living burden on Nigerians.