Surging Food Prices Heighten Nigeria’s Inflation Concerns

A renewed surge in food prices nationwide have become the country’s biggest inflationary concern, prompting the Centre for the Promotion of Private Enterprise (CPPE) to advocate for stronger structural reforms rather than further monetary tightening.

The CPPE’s review of the National Bureau of Statistics’ June inflation report shows a broadly stable headline inflation, which eased marginally to 15.91 per cent in June from 15.93 per cent in May, while month-on-month inflation slowed to 1.66 per cent from 1.75 per cent. This suggests that overall price growth has largely plateaued.

However, the think tank noted that the modest improvement in headline inflation masked a sharp resurgence in food prices. Year-on-year food inflation rose to 17.52 per cent in June from 17.43 per cent in May, while month-on-month food inflation jumped significantly to 3.75 per cent from 2.98 per cent—the strongest monthly increase in several months.

Food prices have remained elevated following the Sallah celebrations, deepening concerns about food inflation. Prices of staples such as pepper and tomato in major open markets (including Lagos and Abuja) currently range from N5,000 to N7,500 per kilogram.

The retail price of a small bowl (paint bucket) of fresh Ata Rodo (Habanero/Scotch Bonnet) sells from N7,000 to N12,000, while large wholesale bags range from N26,000 in northern rural areas to as high as N120,000 in Lagos. Wholesale prices for a large basket of fresh Tatase (Bell Pepper) range between N12,000 and N15,000, while retail prices are about N5,000 to N7,000 per kilogram. A bag of dried peppers or chillies typically sells for between N75,000 and N88,000, depending on quality and origin.

This renewed rise in prices, according to CPPE Chief Executive Officer Muda Yusuf, underscores the continued pressure on household incomes and the broader cost of living.

He warned that persistently high food prices remain the biggest contributor to poverty, food insecurity, and declining purchasing power. Yusuf stressed that sustained moderation in food costs is essential for improving living standards and strengthening public confidence in ongoing economic reforms.

Despite the spike in food prices, the CPPE described the continued moderation in core inflation as encouraging, attributing it to improved exchange rate stability and better macroeconomic conditions, which have helped reduce imported inflation and non-food price pressures.

The report also highlighted sustained inflationary pressure in urban centres. Urban inflation stood at 16.08% year-on-year, above the national headline rate, while month-on-month urban inflation increased to 2.13% from 1.99% in May.

CPPE partly linked this trend to increased migration from insecure rural communities into urban areas, resulting in higher demand for housing, transportation, utilities, and other essential services. The organisation argued that improving security in farming communities would not only boost agricultural production but also reduce pressure on urban infrastructure and living costs.

CPPE maintained that Nigeria’s inflation challenge remains fundamentally structural rather than monetary, noting that supply-side constraints are the main drivers of food inflation. These include insecurity in farming areas, rising transportation and logistics costs, high energy prices, expensive fertiliser, supply chain disruptions, and imported inflation linked to global geopolitical developments.

According to the report, food, transportation, housing, utilities, and energy account for about 72% of current inflationary pressures. CPPE suggested that policy interventions should focus on these sectors to achieve meaningful and lasting reductions in inflation.

The organisation commended the Minister of Finance and Coordinating Minister of the Economy for establishing a Ministerial Advisory Committee tasked with recommending practical solutions to Nigeria’s structural economic challenges and the cost-of-living crisis. CPPE stated that this initiative recognises that macroeconomic stability must be supported by reforms that improve productivity, reduce business costs, and strengthen household welfare.

The think tank urged governments at all levels to prioritise restoring security in farming communities, expanding irrigation and mechanised agriculture, promoting technology adoption, improving farmers’ access to affordable finance and inputs, reducing post-harvest losses through better storage infrastructure, and lowering transportation and logistics costs across the agricultural value chain. It also advocated making agriculture more technology-driven and commercially attractive to encourage greater youth participation.

What measures do you think would best reduce food prices for Nigerian households?