Food Inflation, Supply Gaps Threaten Inflation Gains, Says CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria’s modest relief in headline and core inflation recorded in July 2025 may be undermined by rising food prices and persistent structural constraints in the economy.

According to the July 2025 inflation report released by the National Bureau of Statistics (NBS), headline inflation slowed for the fourth consecutive month, easing to 21.88 per cent from 22.22 per cent in June.

On a month-on-month basis, food inflation also moderated slightly, declining from 3.25 per cent in June to 3.12 per cent in July, while core inflation dropped marginally year-on-year by 0.03 per cent and slowed sharply month-on-month from 3.46 per cent to 0.97 per cent.

The CPPE, in its reaction to the figures, attributed the moderation to a gradually stabilising macroeconomic environment, supported by exchange rate stability, improved investor confidence, . and the lingering impact of government waivers on import duties for staples such as rice, maize, and sorghum.

The base effect, stemming from high inflationary conditions in 2022, was also cited as a significant contributor to the recent downward trend.

Despite these positive indicators, the CPPE cautioned that underlying risks remain. It noted that month-on-month headline inflation rose from 1.68 per cent in June to 1.99 per cent in July, while year-on-year food inflation accelerated from 21.97 per cent to 22.74 per cent.

These increases, the organisation said, highlight the continuing vulnerability of the economy to supply-side shocks.

Dr. Muda Yusuf, Director and Chief Executive Officer of CPPE, stressed that sustaining the gains requires coordinated monetary, fiscal, and structural reforms.

He identified foreign exchange stability, fiscal discipline, and innovative monetary policy tools as essential to anchoring inflation expectations.

Yusuf also underscored the need to tackle structural bottlenecks such as high logistics costs, insecurity, climate risks, and port inefficiencies, which continue to elevate costs and fuel inflationary pressures.

“The July 2025 inflation figures provide a basis for cautious optimism. While progress has been made in moderating headline and core inflation, the persistence of food inflation and the uptick in month-on-month price increases point to unresolved structural weaknesses.

“Policymakers must consolidate the gains through disciplined fiscal management and innovative approaches to liquidity control, especially as lending rates in the economy have already risen above 30 per cent for most businesses,” Yusuf said.

The CPPE concluded that Nigeria’s inflation outlook remains fragile and will require sustained reforms and effective coordination between monetary and fiscal authorities to steer the economy toward long-term stability.

Food Inflation, Supply Gaps Threaten Inflation Gains, Says CPPE is first published on The Whistler Newspaper