CPPE Flags Food Inflation Surge as Major Threat to Nigeria’s Economic Stability

By Adedapo Adesanya

Despite signs that Nigeria’s headline inflation is easing, rising food prices continue to threaten the country’s inflation outlook, the Chief Executive of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has warned.

In a policy brief released following the latest inflation report, Yusuf noted that while headline inflation has largely plateaued—moderating slightly on a month-on-month basis from 1.75 per cent to 1.66 per cent—structural inflationary pressures in the real economy remain pronounced.

The dominant concern, he said, is the renewed acceleration in food inflation, suggesting food prices have resumed an upward trajectory after a brief period of moderation. He warned that this trend carries significant economic and social implications, as food inflation remains the primary driver of Nigeria’s cost-of-living crisis, eroding household purchasing power, worsening poverty and food insecurity, and weakening the inclusiveness of ongoing reforms.

Yusuf emphasised that sustained moderation in food prices is critical to improving citizens’ welfare and bolstering public confidence in the economic reform programme.

While acknowledging the easing of core inflation as encouraging, he drew attention to persistent urban inflation, which stood at 16.08 per cent—exceeding the national headline rate of 15.91 per cent. Month-on-month urban inflation also accelerated from 1.99 per cent to 2.13 per cent, indicating particularly intense price pressures in urban centres.

He attributed rising urban inflation partly to increasing population displacement from rural communities ravaged by insecurity. As more households migrate to cities, demand for housing, transportation, utilities, and other essential services surges, compounding inflationary pressures and creating additional urbanisation challenges.

Addressing insecurity in farming communities, Yusuf argued, is vital not only for protecting lives and boosting agricultural output but also for easing cost pressures in urban areas. He stated that the June Consumer Price Index (CPI) data reinforces the view that Nigeria’s inflation challenge is predominantly structural rather than monetary.

On the monetary policy outlook, the CPPE chief contended that the data does not justify further monetary tightening, given that headline inflation has largely stabilised. He expects the Monetary Policy Committee (MPC) to hold the current rate at its next meeting, urging monetary and fiscal authorities to prioritise structural reforms aimed at expanding food supply, improving logistics, reducing energy and production costs, lowering debt service burdens, and strengthening domestic value chains.

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