Food inflation remains biggest threat despite easing headline rate – CPPE

Food inflation remains Nigeria's most significant economic challenge, despite a slight dip in the overall inflation rate, according to the Centre for the Promotion of Private Enterprise (CPPE).

The private sector advocacy group warned that persistent structural problems continue to fuel food prices and deepen the cost-of-living crisis. Nigeria's headline inflation eased marginally to 15.91% in June from 15.93% in May. However, food inflation surged to 17.52% year-on-year, with a sharp 3.75% month-on-month increase, signaling renewed pressure on essential food items.

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The dominant concern in the report is the renewed acceleration in food inflation.

"The dominant concern in the report is the renewed acceleration in food inflation," the CPPE stated, noting that food prices have resumed an upward trend. Muda Yusuf, CEO of CPPE, emphasized that sustained moderation in food prices is crucial for easing the cost-of-living crisis and bolstering public confidence in economic reforms.

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food inflation continues to pose the greatest risk to household welfare because it directly affects purchasing power and deepens poverty.

The CPPE argues that Nigeria's inflation is primarily a structural issue, driven by factors such as insecurity in farming communities, high transportation and logistics costs, rising energy prices, expensive fertilizers, supply chain disruptions, and imported inflation. These issues, the group contends, are beyond the scope of monetary policy alone.

"The June inflation report reinforces the view that Nigeria’s inflation challenge is predominantly structural rather than monetary," the policy brief stated. The CPPE highlighted that food, transportation, housing, utilities, and energy account for approximately 72% of inflationary pressures. Therefore, government interventions should prioritize these sectors. The organization also expressed concern over persistent inflation in urban centers, which stood at 16.08% in June.

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The June inflation report reinforces the view that Nigeria’s inflation challenge is predominantly structural rather than monetary.