The Centre for the Promotion of Private Enterprise (CPPE) has urged the government to tackle insecurity, energy costs and transportation challenges to sustain disinflation gains.
CPPE, which noted that price escalation has slowed, attributed the slight increase in Nigeria’s inflation rate in May 2026 to external economic shocks, particularly the recent geopolitical tensions in the Middle East.
The Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS) shows that headline inflation rose marginally to 15.93 per cent in May 2026 from 15.69 per cent in April, which the Chief Executive Officer of CPPE, Muda Yusuf, attributed to the continuing impact of disruptions in global energy markets and international supply chains.
“The surge in crude oil prices, elevated marine insurance costs, disruptions to shipping routes and higher import costs have all combined to exert upward pressure on domestic prices,” Yusuf said.
Despite the increase in the headline figure, the CPPE noted that underlying indicators pointed to a gradual easing of inflationary pressures.
The organisation highlighted that headline inflation moderated on a month-on-month basis from 2.13 per cent in April to 1.75 per cent in May, while food inflation slowed from 3.63 per cent to 2.98 per cent over the same period.
“This suggests that although inflationary pressures persist, the pace of price escalation is slowing,” Yusuf stated.
He further observed that Nigeria’s current inflation rate remains significantly below the 26.06 per cent recorded in May 2025, describing the development as evidence of substantial progress in the country’s disinflation journey over the past year.
The CPPE, however, expressed concern over the continued pressure on household budgets, noting that food and beverages, transportation, housing, energy, health and education account for about 87 per cent of headline inflation.
“Food inflation at 16.96 per cent remains particularly concerning, as it continues to outpace headline inflation and weaken household purchasing power,” Yusuf said.
The economist identified insecurity in major agricultural regions as one of the key structural factors driving elevated food prices.
According to him, insecurity has displaced farming communities, reduced cultivated land, disrupted supply chains and increased transportation costs, resulting in lower agricultural output and tighter food supplies.
“Therefore, tackling insecurity is not only a security imperative; it is also a critical inflation-management strategy,” he said.
The CPPE argued that Nigeria’s inflation challenge remains largely cost-push in nature and cautioned against relying solely on monetary tightening to address the problem.
“The solution lies less in monetary tightening and more in addressing the structural drivers of production and distribution costs,” Yusuf noted.
He called on government to focus policy interventions on improving food security, strengthening logistics infrastructure, investing in mass transit and rail transportation, enhancing energy security and restoring safety in farming communities.
Looking ahead, the CPPE expressed cautious optimism about the inflation outlook, citing recent diplomatic progress in the Middle East and the moderation in global crude oil prices.
“The recent diplomatic breakthrough in the Middle East and the moderation of crude oil prices from about $90 per barrel to approximately $83 per barrel provide grounds for cautious optimism,” Yusuf said.
He added that if geopolitical tensions continue to ease and global supply chain conditions improve, inflationary pressures could begin to moderate further from the third quarter of 2026.
“For now, the inflation uptick appears to be more of an external shock phenomenon and domestic structural headwinds than a reflection of domestic macroeconomic instability,” he stated.
Yusuf stressed that policymakers should prioritise addressing insecurity, food supply constraints, transportation costs and energy prices, describing them as the most critical pressure points affecting citizens’ welfare and the competitiveness of businesses.
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