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The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that consumer confidence remains weak despite Nigeria’s inflation showing signs of relief.
According to the latest figures, headline inflation fell for the fifth consecutive month in August 2025, reflecting a steady move toward price stability. However, CPPE noted that persistently high food prices and low purchasing power continue to weigh heavily on households.
The inflation rate eased to 20.12 per cent, down from 21.88 per cent in July, a notable 1.76 percentage point decline.
Month-on-month inflation also slowed sharply, with prices rising by just 0.74 per cent in August compared with 1.99 per cent in July, one of the lowest sequential increases in over a year.
In his analyses, Dr Muda Yusuf explained that consumer pessimism is gradually easing, suggesting that households are beginning to adjust expectations as inflation slows.
“This sustained moderation suggests that Nigeria is gradually regaining macroeconomic stability. “Business confidence has improved, as shown by the NESG–Stanbic IBTC Business Confidence Monitor, which has posted six consecutive months of positive readings in 2025. “However, consumer confidence remains fragile due to persistently high food prices and weak purchasing power. “Encouragingly, consumer pessimism is gradually easing, suggesting that households are beginning to adjust expectations as inflation slows.”
Yusuf noted that the main contributors to inflation in August remained largely the food and alcoholic beverages; restaurants and accommodation services; transport and energy costs.
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He said food inflation moderated to 21.87 per cent from 22.74 per cent in July, while core inflation (excluding food and energy) declined to 20.33 per cent from 21.33 per cent, indicating broad-based easing in price pressures.
He noted that several factors underpin the continued deceleration in inflation which include base effects from the unusually high inflation rates recorded in 2024.
“Stabilization of the foreign exchange market, which has reduced imported inflation and improved business confidence. “Improved agricultural production from sub-national government interventions, helping boost food supply and contain price spikes.”
To consolidate and build on these gains, the centre suggested a coherent mix of fiscal, monetary, and structural reforms will be critical.
They include: ” To maintain macroeconomic stability; continue stabilizing the exchange rate; deepen fiscal consolidation to curb deficits and manage public debt prudently; address structural bottlenecks; collaborate with state governments to remove productivity constraints; invest in infrastructure, logistics, and security to improve output and reduce costs; strengthen policy coordination; moderate money supply growth through tighter monetary-fiscal coordination; align fiscal, tax, and trade policies to reduce production and operating costs across sectors; enhance food security; sustain the implementation of targeted interventions such as input subsidies, storage facilities, and mechanization programs to lower food production costs and ease pressure on household budgets.”
The CPPE boss empahsised that if the above measures are sustained, Nigeria could witness a further decline in inflation, a gradual rebound in consumer confidence, and stronger foundations for inclusive and sustainable economic growth.
