Despite a notable easing of inflation in early 2026, Nigeria continues to face significant challenges in achieving long-term price stability without addressing the root causes of high costs, says Kalu Aja, a certified financial education instructor.
Speaking at the Liberalist Centre’s monthly webinar last week Thursday, Aja said the country’s route to sustained, single-digit inflation runs directly through free trade, food supply expansion, and the restoration of security in farming communities, especially in the northern part of the country.
“Food is an inflation enabler in Nigeria. If you trade and do commerce, you have lower inflation. If you’re not trading and don’t do commerce, you have high inflation,” he explained.
The expert observed that while monetary policy is often the focus of government intervention, the actual driver of Nigerian inflation is the volatility of food supply linked to domestic instability.
“Insecurity is driving inflation because the trigger of inflation in Nigeria is food,” he said, pointing out that insecurity in northern food-producing zones has suppressed output, leading to the anomaly of southern states recording lower inflation than their northern counterparts.
According to data from the National Bureau of Statistics (NBS), headline inflation fell to 15.1 percent in January 2026, down from 15.15 percent recorded in December 2025, with food inflation declining to 8.89 percent. However, Aja warned that these gains remain vulnerable unless the structural connectives, such as security and trade fluidity, are permanently repaired.
The March event is part of the Liberalist Centre’s ongoing programme of policy education webinars aimed at strengthening economic and civic literacy across the continent. While dissecting the topic of the event titled ‘Nigeria’s Free Trade Policy and lts Single-Digit Inflation,’ Aja noted that increasing the supply of goods through open commerce is the most direct way to lower prices and shield household welfare from local shocks.
“If you want to get single-digit inflation, you have to promote free trade because the import of commerce brings inflation down to a single digit,” he said. “You have to also make food locally so you can trade with that commerce… It’s that increase in the supply of food that allows us to address the shocks that are caused by a fall in the local manufacturing or output.”
He added that while protectionist border policies are a recurring feature of Nigerian economic management, closing borders without sufficient domestic production is self-defeating.
“If you close the border and you have no local products in your country to sell, then you are simply creating inflation. Remember what inflation is? Too much money chasing too few goods. So if you close the border, you’ve said no trade, no commerce, but you haven’t brought output. Prices will go up,” explained Aja.
Aja’s claims are not unfounded. Nigeria’s repeated ban on rice imports combined with border closures lent credence to this assertion. The attendant consequences of this policy proved counterproductive. Traders resorted to smuggling and parallel markets, mostly importing rice through Benin, which undermined official revenue and distorted prices. And instead of lowering prices, the policy pushed domestic rice prices up, hurting consumers and informal traders.
The expert further highlighted how policy advocates and officials often fail because they do not grasp the underlying mechanics of the markets they seek to regulate.
He said: “You can’t fix something if you don’t know how it works. Imagine if someone asked me to fix a submarine; I don’t know how a submarine works, so I can’t fix it. Most of the problem with our policy advocates in Africa is that we don’t understand the connective tissues of what makes the economy work.
“Unless the system and institutions are able to understand the fact that supply is at the core of price stability, then it would be entirely difficult for us to be sure exactly how citizens’ welfare and their right to affordable living would be protected,” warned Aja.
