The Centre for the Promotion of Private Enterprise (CPPE) has projected a possible moderation in Nigeria’s inflationary pressures in the coming months, attributing the outlook to declining global crude oil prices and easing geopolitical tensions in the Middle East.
The projection was contained in a policy brief titled “Policy Brief on May 2026 Inflation Report” released by the organisation’s Chief Executive Officer, Dr Muda Yusuf.
According to Yusuf, crude oil prices have declined from about $90 to around $83 per barrel, creating a cautious but positive outlook for inflation trends if global supply chain conditions continue to stabilise.
He noted that Nigeria’s headline inflation rose marginally by 0.24 per cent, from 15.69 per cent in April 2026 to 15.93 per cent in May 2026.
The increase, he said, reflects the lingering effects of geopolitical tensions in the Middle East on global energy markets and 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 stated.
He explained that inflationary pressures in Nigeria are still largely driven by key consumption categories including food and beverages, transportation, housing, energy, health and education, which together account for about 87 per cent of headline inflation.
Food inflation, which stood at 16.96 per cent, remains a major concern, as it continues to outpace headline inflation and erode household purchasing power.
Yusuf also identified insecurity in food-producing regions as a critical structural driver of rising food prices.
According to him, displacement of farming communities, reduced cultivated land, and disruptions in agricultural logistics have significantly constrained food supply.
“A major structural factor behind elevated food prices is the persistent insecurity in key food-producing regions. This has reduced output and increased transportation costs, thereby sustaining food inflation,” he said.
He stressed that addressing insecurity is essential not only for national stability but also as a key strategy for inflation control.
The CPPE chief maintained that Nigeria’s inflation challenge remains largely cost-push in nature, arguing that monetary tightening alone would not sufficiently address the underlying pressures.
He urged government intervention in areas such as food security, transport infrastructure, mass transit systems, rail development, energy supply, and safety in farming communities to ease cost pressures across the economy.
Yusuf added that the recent diplomatic progress in the Middle East and the moderation in crude oil prices offer “grounds for cautious optimism,” suggesting that inflationary pressures could begin to ease from the third quarter of 2026 if current trends persist.
“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 said.
He concluded that policy focus should remain on addressing structural bottlenecks that drive production and distribution costs, noting that such reforms are critical to improving household welfare and business competitiveness.
