Food inflation remains Nigeria's biggest threat despite headline rate easing: CPPE

Despite a marginal easing of Nigeria's headline inflation rate in June, the Centre for the Promotion of Private Enterprise (CPPE) has issued a stark warning: rising food prices continue to be the nation's most significant economic challenge. The private sector advocacy group highlighted that persistent structural problems are fueling food inflation and deepening the cost-of-living crisis.

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

Data from the National Bureau of Statistics (NBS) revealed that headline inflation dipped slightly to 15.91% in June from 15.93% in May. However, this minor improvement was overshadowed by a sharp rise in food inflation, which climbed to 17.52% year-on-year. Month-on-month food inflation also saw a significant increase of 3.75%, signaling renewed pressure on essential food items.

"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 after a short period of moderation. Muda Yusuf, CEO of CPPE, emphasized that food inflation poses the greatest risk to household welfare by directly impacting purchasing power and increasing poverty. He stressed that sustained moderation in food prices is crucial for alleviating the cost-of-living crisis and bolstering 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 problem is increasingly structural, driven by factors beyond monetary policy. These include insecurity in farming regions, elevated transportation and logistics costs, rising energy prices, expensive fertilizers, supply chain disruptions, and imported inflation linked to global geopolitical tensions. The organization's policy brief suggests that government interventions should prioritize sectors like food, transportation, housing, utilities, and energy, which account for approximately 72% of current inflationary pressures.

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