The Centre for the Promotion of Private Enterprise (CPPE) has attributed Nigeria’s marginal inflation in May to the continuing impact of recent geopolitical tensions in the Middle East on global energy markets and supply chains.
Nigeria’s annual inflation rate rose to 15.93 per cent in May from 15.69 per cent in April 2026, the National Bureau of Statistics (NBS) said in its latest inflation report.
The NBS said the May 2026 headline inflation rate showed an increase of 0.24 per cent compared to the April 2026 Headline inflation rate.
On a month-on-month basis, the bureau said it was 1.75 per cent, which was 0.39 per cent lower than the rate recorded in April 2026 (2.13 per cent).
The bureau said the food inflation rate in May 2026 on a month-on-month basis was 2.98 per cent, down by 0.65 per cent points from April 2026 (3.63 per cent).
In a policy brief signed by Muda Yusuf, director of CPPE, on Monday, the think tank said 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.
“However, beneath the year-on-year increase lies a more encouraging trend. Headline inflation moderated on a month-on-month basis from 2.13 per cent in April to 1.75 per cent in May, while food inflation eased from 3.63 per cent to 2.98 per cent,” Mr Yusuf said.
This, he said, suggests that although inflationary pressures persist, the pace of price escalation is slowing.
“It is also noteworthy that the current inflation rate remains significantly below the 26.06 per cent recorded in May 2025, underscoring the substantial disinflation achieved over the past year.”
The think tank said the major drivers of inflation remain food and beverages, transportation, housing, energy, health and education, which collectively account for about 87 per cent of headline inflation.
“This highlights the reality that the inflation burden is concentrated in the basic necessities consumed by ordinary Nigerians. Food inflation at 16.96 per cent remains particularly concerning, as it continues to outpace headline inflation and weaken household purchasing power,” he added.
Mr Yusuf said a major structural factor behind elevated food prices is the persistent insecurity in key food-producing regions.
“Insecurity has displaced farming communities, reduced cultivated acreage, disrupted agricultural supply chains and increased transportation costs. The consequence is lower agricultural output and tighter food supply, which continue to fuel food inflation.
“Therefore, tackling insecurity is not only a security imperative; it is also a critical inflation-management strategy. The inflation challenge remains largely cost-push in nature.”
Accordingly, he said the solution lies less in monetary tightening and more in addressing the structural drivers of production and distribution costs.
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The think tank said the government intervention should focus on improving food security, strengthening logistics infrastructure, investing in mass transit and rail transportation, enhancing energy security and restoring safety in farming communities.
Positive outlook
“The recent diplomatic breakthrough in the Middle East and the moderation of crude oil prices from about $90 per barrel to approximately $83 per barrel provide grounds for cautious optimism.”
He said if geopolitical tensions continue to ease and supply chain conditions improve, inflationary pressures could begin to moderate from the third quarter of 2026.
“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.
“The policy priority should therefore be to tackle the structural cost drivers of inflation, particularly insecurity, food supply constraints, transportation costs and energy prices. These are the pressure points that matter most to citizens’ welfare and business competitiveness,” Mr Yusuf said.
