Inflation Relief at Risk as Global Energy Shocks Threaten Gains
Nigeria’s modest easing in inflation may be short-lived, as rising global energy shocks pose fresh risks to price stability, the Centre for the Promotion of Private Enterprise has warned.
In its latest policy brief, CPPE chief executive Muda Yusuf noted that headline inflation dipped slightly to 15.06 per cent year-on-year in February 2026, down from 15.10 per cent in January and significantly lower than the 26.27 per cent recorded in the same period last year.
Despite the marginal decline, inflationary pressures remain elevated on a monthly basis. Data from the National Bureau of Statistics showed that month-on-month inflation rose to 2.01 per cent, while food inflation climbed sharply to 4.69 per cent, signalling persistent cost pressures across the economy.
The CPPE attributed the year-on-year easing to base effects, tighter monetary policy and relative macroeconomic stability. However, it cautioned that the improvement is fragile and does not yet reflect a sustained shift in price dynamics. Rising costs of food, transport and energy continue to erode household purchasing power, particularly in urban areas.
Businesses, especially small and medium enterprises, are also facing mounting challenges as high energy, logistics and raw material costs squeeze profit margins amid weak consumer demand. Yusuf stressed that slower inflation does not mean lower prices, but only a reduced pace of increase.
The think tank identified escalating geopolitical tensions in the Middle East involving Iran, Israel and the United States as a key threat. The crisis has pushed global crude oil prices above $100 per barrel, raising fears of supply disruptions and higher shipping costs.
According to the CPPE, the ripple effects for Nigeria include rising petrol and diesel prices, increased transport costs, exchange rate pressures and higher food prices driven by more expensive inputs. These impacts are amplified by Nigeria’s structural dependence on fuel-powered energy due to unreliable electricity supply.
The organisation estimates that poor electricity supply costs the economy between N7 trillion and N10 trillion annually, with generator usage alone exceeding N3.7 trillion each year. Improving power generation and distribution, it said, remains the most sustainable way to reduce energy costs and curb inflation.
The CPPE urged policymakers to remain cautious, warning that premature easing of monetary or fiscal policies could reverse recent gains. It also called for prudent management of any oil revenue windfalls to strengthen foreign exchange reserves and support productive sectors of the economy.
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