Inflation slowdown under threat as domestic, global risks mount – LCCI

By Merit Ibe

The Lagos Chamber of Commerce and Industry (LCCI) has cautioned that recent gains in moderating inflation may be short lived, as emerging domestic and global risks threaten to reverse the trend.

Although Nigeria’s headline inflation eased slightly to 15.06 per cent in February 2026 from 15.10 per cent in January, the Chamber described the improvement as fragile and urged sustained policy action to consolidate the progress.

In a statement themed: “Consolidating on Inflation moderation in the face of new threats”, Director General of the chamber, Dr Chinyere Almona noted that the rising geopolitical tensions linked to the Iran conflict in the Middle East could trigger volatility in global energy markets, potentially increasing fuel, transportation, and logistics costs.

Almona said Nigeria has an opportunity to partially insulate itself from volatile oil prices in international markets by expanding local refining capacity and boosting crude supply to local refineries to meet local needs.

She further pointed to the fact that the month-on-month inflation rate rose to 2.01% in February, after contracting in January, indicating that price pressures remain persistent.

“In addition, food prices remain the major driver of inflation, reflecting structural challenges in Nigeria’s food supply chain, high logistics costs, and production constraints.”

From the perspective of the organized private sector, Almona argued that the slight moderation in inflation offers cautious optimism for businesses and households, as high inflation has significantly eroded purchasing power, increased production costs, and weakened consumer demand across several sectors.”

She further viewed that with the risk of exchange-rate volatility amid disruptions to global supply chains, renewed pressure in the foreign exchange market could increase the cost of imported raw materials, machinery, pharmaceuticals, and food items, thereby pushing up production and consumer prices.

“In addition, insecurity in food-producing regions, Climate-related disruptions, and high transportation costs continue to threaten food supply and price stability.”

The Chamber, therefore, emphasized that deliberate policy actions are required to sustain the current inflation moderation, suggesting that the government should prioritize exchange-rate stability by improving foreign exchange liquidity and boosting non-oil export earnings. “Strengthening food security through improved agricultural productivity, addressing insecurity in farming communities, and investing in storage and logistics infrastructure will also help moderate food prices.

“Furthermore, accelerated reforms in the power and energy sectors are critical to lowering production costs for businesses. Reliable electricity supply and improved energy infrastructure would significantly reduce cost pressures across manufacturing, trade, and services.”

The LCCI also stressed the need for greater efficiency in transportation and trade infrastructure, including improvements to port operations, cargo evacuation systems, and digital trade processes, to reduce logistics costs that significantly contribute to consumer prices.

While the marginal decline in inflation is encouraging, to the Chamber, sustaining this trend will depend on consistent macroeconomic management, structural reforms, and policies that enhance domestic productivity.

“Urgent actions are needed to assuage the fears in many quarters that price pressures will reverse the deceleration of our inflation rate. “The month-on-month inflation rates since the start of this year already indicate a fragile grip on inflationary pressures. Supply-side interventions will be more realistic than price controls imposed on manufacturers and investors.”