Nigeria
The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria’s recent slowdown in inflation may not last, as rising costs of energy, food, and transportation begin to push prices up again. The concern follows a review of the March 2026 Consumer Price Index (CPI) released by the National Bureau of Statistics (NBS), which shows renewed pressure on household expenses across the country.
In a policy brief signed by its Chief Executive Officer, Dr Muda Yusuf, the CPPE said that although inflation had shown signs of easing in recent months on a year-on-year basis, the latest figures point to a fresh surge in price pressures—especially on a month-on-month basis.
According to the data, headline inflation rose to 15.38% in March 2026. More concerning, however, is the sharp jump in monthly inflation, which climbed to 4.18%—almost double what was recorded in February.
Dr Yusuf explained that this trend highlights how fragile the current disinflation process is, warning that underlying cost pressures in the economy remain strong.
He pointed to rising energy prices as a major factor driving the increase. Energy costs, he noted, continue to affect nearly every part of the economy—from production to transportation and distribution.
“The recent uptick in inflation is largely reflective of renewed energy price pressures,” Yusuf stated, adding that Nigeria’s heavy reliance on diesel, petrol, and gas for power and logistics makes the situation worse.
The impact of higher energy costs is already being felt across sectors. Businesses are spending more on production and transportation, and these costs are being passed on to consumers through higher prices.
The CPPE further explained that this “cost-push” inflation is behind the recent spike, showing that inflationary pressures are far from under control.
Food and transportation costs remain the biggest drivers of inflation. According to the report, these two areas account for about 70% of inflation pressures when both direct and indirect effects are considered.
Food inflation stood at 14.31% year-on-year, while core inflation—which reflects broader price increases—rose to 16.21%.
Dr Yusuf stressed that transportation costs, heavily influenced by fuel prices and poor logistics systems, continue to push prices higher across the economy.
“Higher transport costs raise the cost of moving food, goods and services nationwide, thereby amplifying inflation,” he explained.
The CPPE warned that the dominance of food and transport costs in the inflation basket has serious consequences for everyday Nigerians.
These are essential expenses that households cannot avoid, meaning rising prices directly affect living conditions.
According to the report, the situation is already leading to:
- Reduced purchasing power
- Increased cost of living
- Greater poverty and vulnerability, especially in rural communities
The organisation also highlighted structural issues in the transport sector, particularly the heavy reliance on private operators for road transport, which contributes to unstable pricing.
To address the situation, the CPPE called on both federal and state governments to focus on practical, long-term solutions.
Key recommendations include:
- Improving agricultural productivity by enhancing security in farming communities
- Strengthening rural infrastructure and logistics
- Expanding access to farming inputs and financing
- Promoting mechanised and modern farming methods
On transportation, the group urged:
- Increased investment in mass transit systems such as buses and rail
- Reduced dependence on fragmented private transport systems
- Introduction of regulations to prevent exploitative pricing
- Improved urban mobility infrastructure
The CPPE also cautioned against relying solely on monetary policies like interest rate hikes to tackle inflation.
It argued that current inflation is largely driven by supply-side challenges—such as energy costs and logistics—not excess demand.
According to the organisation, tighter monetary policy could do more harm than good by:
- Slowing economic growth
- Reducing investment
- Limiting access to financing for businesses
Nigeria has struggled with persistent inflation driven by structural challenges, including energy dependence, transport inefficiencies, and supply chain disruptions. While recent data suggested a gradual slowdown in inflation, the latest figures indicate that stability may still be uncertain.
The CPPE concluded that while there are still signs of easing inflation on a yearly basis, the recent rise in monthly figures shows that economic stability remains fragile. It stressed the need for urgent, targeted policies that address the root causes of inflation—especially in energy, food, and transportation—to prevent further pressure on households and businesses.