Middle East Tensions Fuel Nigeria's Inflation, CPPE Cites Insecurity as Key Driver

Geopolitical tensions in the Middle East have significantly impacted global energy markets and supply chains, contributing to a marginal increase in Nigeria's headline inflation to 15.93% in May 2026 from 15.69% in April. The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, noted that rising crude oil prices, elevated marine insurance costs, and shipping disruptions have collectively pushed domestic prices upward.

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This suggests that although inflationary pressures persist, the pace of price escalation is slowing.

However, Yusuf pointed to a more encouraging trend on a month-on-month basis, where inflation moderated from 2.13% in April to 1.75% in May. Food inflation also eased from 3.63% to 2.98%. This slowdown in the pace of price escalation suggests that while inflationary pressures persist, they are not accelerating at the same rate. Notably, the current inflation rate is substantially lower than the 26.06% recorded in May 2025, indicating significant disinflation over the past year.

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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 primary drivers of inflation remain concentrated in essential goods and services, including food and beverages, transportation, housing, energy, health, and education, which account for approximately 87% of the headline inflation. Food inflation, in particular, remains a concern at 16.96%, outpacing headline inflation and eroding household purchasing power. The CPPE identifies persistent insecurity in key food-producing regions as a major structural factor behind elevated food prices, leading to displacement, reduced cultivation, disrupted supply chains, and increased transportation costs.

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Food inflation at 16.96 per cent remains particularly concerning, as it continues to outpace headline inflation and weaken household purchasing power.

Yusuf stressed that tackling insecurity is crucial not only for national security but also as a vital inflation-management strategy. The CPPE advocates for solutions that address the structural drivers of production and distribution costs, suggesting government interventions should focus on improving food security, strengthening logistics infrastructure, investing in mass transit and rail, enhancing energy security, and restoring safety in farming communities. He expressed cautious optimism due to recent diplomatic breakthroughs in the Middle East and a moderation in crude oil prices.

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Insecurity has displaced farming communities, reduced cultivated acreage, disrupted agricultural supply chains and increased transportation costs.