Follow Us on Google
By Merit Ibe
The Centre for the Promotion of Private Enterprise (CPPE) has called on the government to take urgent steps to address structural cost pressures, support agricultural producers, and restore confidence in Nigeria’s inflation data.
In its policy brief on the December 2025 inflation figures, the Centre acknowledged that inflation is moderating, largely due to a sharp decline in food prices—a development it described as positive for households and overall economic stability. However, CPPE warned that sustaining this progress will require decisive action, stressing that without structural reforms, recent gains in affordability and price stability may not last.
Nigeria’s inflation rate declined to 15.15 per cent in December 2025, extending a disinflation trend seen over the past 12 months. According to CPPE, falling food prices have been the main driver of this moderation, offering some relief to consumers.
The Centre, however, expressed concerns over recent changes to the methodology used in computing the Consumer Price Index (CPI), noting that these adjustments have raised questions about the credibility of the inflation data, even though they have not significantly altered the disinflation trend so far.
CPPE noted that while inflation is easing, key structural drivers of high costs—such as energy, transportation, logistics, and insecurity—remain unresolved. It also warned that the steep fall in food prices is eroding farmers’ returns, threatening the sustainability of agricultural investments. Balancing consumer affordability with producer viability, the Centre said, has now become an urgent policy priority.
Other News
Dr. Muda Yusuf, Chief Executive Officer of CPPE, said the government is aware of these challenges, citing assurances from the Coordinating Minister for the Economy, Mr. Wale Edun, that steps are being taken to address them.
Yusuf explained that although the decline in inflation suggests that macroeconomic stabilisation efforts are beginning to yield results, changes to CPI computation parameters have weakened data credibility and undermined confidence among investors, businesses, analysts, and policymakers. He stressed the need to strengthen technical capacity and analytical rigour to rebuild trust in official statistics.
He noted that food inflation dropped sharply to 10.84 per cent, with month-on-month food prices contracting—making it the single biggest factor easing cost-of-living pressures. Sustaining this trend, he said, will depend on maintaining agricultural supply and reducing logistics costs.
Despite exchange-rate stability, Yusuf observed that core inflation rose to 18.63 per cent, a development he described as inconsistent with macroeconomic fundamentals. He said this points to deeper structural issues or possible statistical inconsistencies, and called for a review and improvement of the CPI methodology to better reflect economic realities.
According to him, food, housing, utilities, fuel, and transportation remain the biggest contributors to inflation, as they account for the largest share of household spending. He urged targeted cost reductions in these sectors to accelerate disinflation and improve affordability. Yusuf also emphasised the importance of stronger coordination between fiscal and monetary authorities, noting that structural interventions must complement monetary tightening to reduce inflation without harming production.
Among CPPE’s recommendations are intensified efforts to lower food, transportation, and utility costs; addressing insecurity to boost agricultural output; reducing input costs for farmers; introducing guaranteed minimum pricing for key crops; lowering import duties on manufacturing inputs; and strengthening fiscal–monetary policy coordination. The Centre also called on the National Bureau of Statistics to enhance institutional capacity for data accuracy and quality assurance, improve technical and analytical rigour in CPI computation, and rebuild public and investor confidence in Nigeria’s inflation data.
