The Centre for the Promotion of Private Enterprise (CPPE) has attributed the slight increase in Nigeria’s inflation rate in May 2026 to ongoing geopolitical tensions in the Middle East, warning that external shocks continue to exert pressure on domestic prices.
In a policy brief on the May 2026 inflation report, CPPE Chief Executive Officer, Dr. Muda Yusuf, noted that headline inflation rose marginally from 15.69 per cent in April to 15.93 per cent in May, representing an increase of 0.24 percentage points.
According to the organisation, the escalation in crude oil prices, higher marine insurance premiums, disruptions to global shipping routes and increased import costs triggered by tensions in the Middle East have contributed to the inflationary pressures currently being experienced in Nigeria.
Despite the year-on-year increase, CPPE said there were encouraging signs of moderation in price growth. Headline inflation on a month-on-month basis declined 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 over the same period.
The think tank observed that the current inflation rate remains significantly lower than the 26.06 per cent recorded in May 2025, indicating substantial progress in disinflation over the past year.
CPPE identified food and beverages, transportation, housing, energy, health and education as the major contributors to inflation, accounting for about 87 per cent of the headline inflation rate. It expressed concern that food inflation, which stood at 16.96 per cent, continues to exceed the headline figure, thereby eroding household purchasing power.
The organisation also highlighted insecurity in major food-producing regions as a key structural driver of food inflation. It noted that the displacement of farming communities, reduced cultivation, disruptions in agricultural supply chains and rising transportation costs have constrained food production and supply.
“Addressing insecurity is not only a security imperative but also a critical strategy for managing inflation,” the CPPE stated.
The policy institute argued that Nigeria’s inflation challenge remains largely cost-push in nature and cautioned against relying solely on monetary tightening measures. Instead, it urged government authorities to focus on tackling the structural factors driving production and distribution costs.
Among the measures recommended were improving food security, strengthening logistics infrastructure, expanding mass transit and rail transportation, enhancing energy security and restoring safety in farming communities.
Looking ahead, CPPE expressed cautious optimism that inflationary pressures could ease in the third quarter of 2026 following recent diplomatic progress in the Middle East and the moderation of global crude oil prices from around $90 per barrel to approximately $83 per barrel.
The organisation maintained that the recent uptick in inflation reflects the impact of external shocks and domestic structural constraints rather than underlying macroeconomic instability.
It therefore called on policymakers to prioritise efforts aimed at addressing insecurity, food supply challenges, transportation costs and energy prices, describing them as the most critical factors affecting citizens’ welfare and business competitiveness.
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