Fancy cereal used regularly in African city (5)
I believe the answer is:
accra
'african city' is the definition.
(capital of Ghana)
'fancy cereal used regularly' is the wordplay.
'used regularly' indicates alternate letters.
'fancy'+'cereal'='fancycereal'
The alternate letters of 'fancycereal' are 'ACCRA'.
'in' acts as a link.
(Other definitions for accra that I've seen before include "Capital city of Ghana" , "Main city of Ghana" , "Capital of Ghana, African fritter" , "Largest city of Ghana" , "African port" .)