Dare Babalola
The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria’s recent progress in moderating inflation remains fragile, as renewed pressures from rising energy, food and transportation costs begin to reverse earlier gains.
In a policy brief issued on Wednesday following the release of the March 2026 Consumer Price Index report by the National Bureau of Statistics, the CPPE, led by its Chief Executive Officer Muda Yusuf, noted that although inflation had shown signs of easing in previous months on a year-on-year basis, the latest figures indicate a troubling resurgence.
Headline inflation rose slightly to 15.38 per cent in March, while month-on-month inflation surged sharply to 4.18 per cent, almost doubling the February rate.
“The development underscores the fragility of the disinflation process and raises concerns about renewed cost pressures in the economy,” Yusuf stated, adding that underlying inflationary drivers remain largely unresolved.
He attributed the latest spike primarily to rising energy costs, which continue to ripple across key sectors of the economy.
According to him, “energy remains a critical cost driver in Nigeria, given the persistent reliance on gas, diesel and petrol for power generation, logistics and industrial operations,” with the result that increases in energy prices are quickly transmitted into higher transport fares, food prices and production costs.
The CPPE further identified food and transportation as the dominant contributors to inflation, accounting for an estimated 70 per cent of overall price pressures when both direct and indirect impacts are considered.
Food inflation stood at 14.31 per cent year-on-year, while core inflation climbed to 16.21 per cent. Yusuf noted that these trends are particularly concerning because they directly affect household welfare.
“These are non-discretionary expenditures, meaning households cannot easily adjust consumption in response to rising prices,” he said, warning that the continued surge in these components is eroding purchasing power, deepening poverty and widening inequality, especially in rural communities.
Highlighting structural challenges, the CPPE pointed to inefficiencies in Nigeria’s transportation system, where private operators dominate and exert significant pricing power.
“In an environment of rising fuel costs, this structure enables rapid and often disproportionate increases in transport fares, which are quickly transmitted across the economy,” the statement said, stressing that the absence of a well-regulated and efficient public transport system exposes citizens to price shocks.
To address the situation, the CPPE urged governments at all levels to prioritise reforms in agriculture and transportation. It called for improved security in farming communities, better rural infrastructure, increased access to inputs and financing, and the adoption of modern farming techniques to boost productivity and reduce food inflation.
On transportation, the group recommended substantial investment in mass transit systems, including buses and rail, alongside regulatory frameworks to curb exploitative pricing and improve urban mobility.
The organisation also cautioned against further tightening of monetary policy, arguing that the current inflationary trend is largely cost-driven rather than demand-induced.
“Further monetary tightening would be ineffective in addressing the root causes of inflation,” Yusuf warned. “High interest rates would hurt economic growth, investment and productivity, while constraining financing to the real sector.”
Concluding, the CPPE emphasised that Nigeria’s macroeconomic stability remains delicate despite earlier signs of improvement. It urged policymakers to shift focus from narrow monetary measures to broader structural interventions targeting energy, food supply and transportation.
According to Yusuf, “without decisive action in these areas, the gains recorded in inflation moderation may prove temporary, while households and businesses continue to grapple with significant cost pressures.”
