The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that Nigeria’s recent moderation in inflation remains fragile, warning that escalating global energy shocks could reverse the trend and intensify economic pressures on households and businesses.
In its February 2026 Consumer Price Index (CPI) policy brief released on March 22, the CPPE noted that headline inflation eased slightly to 15.06 percent year-on-year, down from 15.10 percent in January and significantly lower than 26.27 percent recorded a year earlier.
The report attributed the decline to base effects, tighter monetary policy, and relative macroeconomic stability.
However, the organisation stressed that the improvement does not signal a decisive turnaround, pointing out that inflationary pressures remain elevated.
On a month-on-month basis, inflation rose to 2.01 percent, while food inflation climbed sharply to 4.69 percent, reversing earlier moderation.
According to CPPE Chief Executive Officer, Dr. Muda Yusuf, the rising costs of food, transport, and energy continue to erode purchasing power, particularly among vulnerable and urban households. He noted that while inflation is slowing, the cost of living remains high, with real incomes still under strain.
The report also highlighted the difficult operating environment for businesses, especially small and medium-sized enterprises (SMEs), citing elevated energy, logistics, and raw material costs.
Weak consumer demand, it added, has limited the ability of businesses to adjust prices, resulting in shrinking profit margins and increased vulnerability.
CPPE identified escalating geopolitical tensions involving Iran, Israel, and the United States as a major risk to Nigeria’s inflation outlook.
The tensions have driven global crude oil prices above $100 per barrel, raising concerns about supply disruptions, particularly along critical routes such as the Strait of Hormuz.
The think tank warned that rising oil prices could translate directly into higher petrol and diesel costs, increased transportation and logistics expenses, exchange rate pressures, and further spikes in food prices.
It further noted that Nigeria’s structural challenges – particularly its reliance on petrol and diesel for power generation due to unreliable electricity supply – amplify the impact of global energy shocks.
The CPPE estimated that poor electricity supply results in annual economic losses of between ₦7 trillion and ₦10 trillion, while spending on generators exceeds ₦3.7 trillion annually.
To mitigate these risks, the organisation called for urgent and coordinated policy action. It recommended strengthening domestic refining capacity, including ensuring stable crude oil supply to facilities such as the Dangote Refinery, to reduce dependence on imported fuel and ease pressure on foreign exchange.
The CPPE also urged governments to invest in affordable public transportation, remove fiscal barriers to renewable energy adoption, and improve electricity supply through enhanced generation and distribution infrastructure.
It further suggested temporary measures such as encouraging remote work to help reduce commuting costs.
The report advised monetary and fiscal authorities to remain cautious, warning against premature policy easing in light of rising monthly inflation and external uncertainties.
It also called for prudent management of oil revenue windfalls to strengthen foreign exchange reserves and support productive sectors.
While acknowledging progress in moderating headline inflation, the CPPE concluded that underlying price pressures and global uncertainties pose significant risks, underscoring the need for proactive and coordinated policy measures to safeguard economic stability and protect citizens.
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