The Centre for the Promotion of Private Enterprise (CPPE) has warned that renewed acceleration in food prices is undermining Nigeria’s fragile macroeconomic stability.
On Wednesday, the National Bureau of Statistics (NBS) said Nigeria’s headline inflation rate eased slightly to 15.91 per cent in June, down from 15.93 per cent in May 2026.
The statistics office said the June 2026 headline inflation rate showed a decrease of 0.02 per cent compared to the May 2026 headline inflation rate.
On a month-on-month basis, the bureau said the headline inflation rate in June 2026 was 1.66 per cent, which was 0.09 per cent lower than the rate recorded in May 2026 (1.75 per cent).
The NBS said the food inflation rate in June 2026 was 17.52 per cent on a year-on-year basis and stood at 25.41 per cent in the same month of the preceding year (June 2025).
On a month-on-month basis, the statistics office said the food inflation rate in June 2026 was 3.75 per cent, up by 0.77 per cent points from May 2026 (2.98 per cent).
“This suggests that food prices have resumed an upward trajectory after a brief period of moderation,” Muda Yusuf, director of CPPE, said in a policy brief on Thursday.
The think tank said the development has important economic and social implications, adding that food inflation remains the greatest driver of the cost-of-living crisis, eroding household purchasing power, worsening poverty and food insecurity, and weakening the inclusiveness of the current reform programme.
“Sustained moderation in food prices is therefore critical to improving welfare and strengthening public confidence in the reform process.
“The continued easing of core inflation is, however, encouraging. It reflects the positive impact of exchange-rate stability and improved macroeconomic conditions in moderating imported inflation and broader non-food price pressures,” Mr Yusuf said.
The think tank highlighted the persistence of urban inflation.
“At 16.08 per cent year-on-year, urban inflation exceeded the national headline rate of 15.91 per cent, while month-on-month urban inflation increased from 1.99 per cent to 2.13 per cent. This suggests that inflationary pressures remain particularly intense in Nigeria’s urban centres,” he said.
He explained that the rising urban inflation may partly reflect increasing population displacement from rural communities affected by insecurity.
“As more households migrate to urban areas, demand for housing, transportation, utilities and other essential services rises, adding to inflationary pressures and related urbanisation challenges.
“Addressing insecurity in farming communities is therefore important not only for the safety of lives and properties, boosting agricultural output but also for easing cost pressures in the cities,” the CPPE said.
Policy implications
Mr Yusuf said the June inflation report reinforces the view that Nigeria’s inflation challenge is predominantly structural rather than monetary.
He said the renewed increase in food inflation reflects persistent supply-side constraints, including insecurity, high transportation and logistics costs, elevated energy prices, rising fertiliser costs, supply-chain disruptions and imported inflation arising from recent geopolitical developments.
“These are challenges that monetary policy cannot resolve.
“The report also indicates that food, transportation, housing, utilities and energy account for approximately 72 per cent of current inflationary pressures. This provides a clear policy direction: Efforts to moderate inflation should be concentrated on these sectors, where interventions are likely to yield the greatest impact,” he said.
In this regard, the CPPE commended the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, for establishing a ministerial advisory committee to recommend practical measures for addressing Nigeria’s structural economic constraints, tackling the cost-of-living crisis and ensuring that the benefits of the reforms translate into broad-based and shared prosperity.
The think tank said the initiative appropriately recognises that macroeconomic stabilisation must be complemented by structural reforms that improve productivity, reduce business costs and strengthen household welfare.
“Priority interventions by the federal, states and local governments should include restoring security in farming communities, expanding irrigation and all-season agriculture, accelerating mechanisation, promoting technology adoption, improving access to affordable agricultural finance and inputs, reducing post-harvest losses through better storage infrastructure, and lowering transportation and logistics costs across the agricultural value chain.
“Equally important is making agriculture more technology-driven and commercially attractive to encourage greater youth participation.”
The CPPE said the government should also sustain exchange-rate stability and deepen domestic petroleum refining to reduce foreign exchange demand for fuel imports, moderate imported inflation and strengthen macroeconomic resilience.
Monetary policy outlook
The think tank said the June inflation data do not warrant further monetary tightening.
“Headline inflation has largely stabilised, core inflation continues to moderate and the principal drivers of inflation remain structural rather than demand-induced,” he said.
Accordingly, the CPPE said it expects the Monetary Policy Committee to maintain the current monetary policy stance at its next meeting.
“The immediate policy priority should be for the monetary authorities to collaborate with the fiscal authorities to accelerate structural reforms that expand food supply, improve logistics, reduce energy and production costs, reduce debt service costs, strengthen domestic value chains and enhance productivity.
“These measures offer the most sustainable path to lower inflation, stronger growth and improved living standards,” Mr Yusuf said.
