By Admin
The June 2026 inflation report points to a broad stabilisation of headline inflation but also reveals a renewed escalation of food prices. While macroeconomic stability is gradually being consolidated, structural inflationary pressures within the real economy remain pronounced, the Centre for the Promotion of Private Enterprises (CPPE) has said.
Headline inflation eased marginally from 15.93% in May to 15.91% in June, while month-on-month inflation moderated from 1.75% to 1.66%. These changes indicate that headline inflation has largely plateaued.
Its Chief Executive Officer, Dr Muda Yusuf, in his policy brief, said the dominant concern in the report is the renewed acceleration in food inflation. Year-on-year food inflation increased from 17.43% to 17.52%, while month-on-month food inflation rose sharply from 2.98% to 3.75%, the strongest monthly increase in several months. This suggests that food prices have resumed an upward trajectory after a brief period of moderation.
This development has important economic and social implications. Food inflation remains the greatest driver of the cost-of-living crisis, eroding household purchasing power, worsening poverty and food insecurity, and weakening the inclusiveness of the current reform programme. Sustained moderation in food prices is therefore critical to improving welfare and strengthening public confidence in the reform process.
The continued easing of core inflation is, however, encouraging. It reflects the positive impact of exchange-rate stability and improved macroeconomic conditions in moderating imported inflation and broader non-food price pressures.
Another notable feature of the report is the persistence of urban inflation. At 16.08% year-on-year, urban inflation exceeded the national headline rate of 15.91%, while month-on-month urban inflation increased from 1.99% to 2.13%. This suggests that inflationary pressures remain particularly intense in Nigeria’s urban centres.
The rising urban inflation may partly reflect increasing population displacement from rural communities affected by insecurity. As more households migrate to urban areas, demand for housing, transportation, utilities and other essential services rises, adding to inflationary pressures and related urbanization challenges. Addressing insecurity in farming communities is therefore important not only for the safety of lives and properties, boosting agricultural output but also for easing cost pressures in the cities.
Policy implications
The June inflation report reinforces the view that Nigeria’s inflation challenge is predominantly structural rather than monetary.
The renewed increase in food inflation reflects persistent supply-side constraints, including insecurity, high transportation and logistics costs, elevated energy prices, rising fertilizer costs, supply-chain disruptions and imported inflation arising from recent geopolitical developments. These are challenges that monetary policy cannot resolve.
The report also indicates that food, transportation, housing, utilities and energy account for approximately 72% of current inflationary pressures. This provides a clear policy direction: Efforts to moderate inflation should be concentrated on these sectors, where interventions are likely to yield the greatest impact.
In this regard, the CPPE commends the Honourable Minister of Finance and Coordinating Minister of the Economy for establishing a Ministerial Advisory Committee to recommend practical measures for addressing Nigeria’s structural economic constraints, tackling the cost-of-living crisis and ensuring that the benefits of the reforms translate into broad-based and shared prosperity. The initiative appropriately recognises that macroeconomic stabilisation must be complemented by structural reforms that improve productivity, reduce business costs and strengthen household welfare.
Priority interventions [by the federal, states and local governments] should include restoring security in farming communities, expanding irrigation and all-season agriculture, accelerating mechanisation, promoting technology adoption, improving access to affordable agricultural finance and inputs, reducing post-harvest losses through better storage infrastructure, and lowering transportation and logistics costs across the agricultural value chain. Equally important is making agriculture more technology-driven and commercially attractive to encourage greater youth participation.
Government should also sustain exchange-rate stability and deepen domestic petroleum refining to reduce foreign exchange demand for fuel imports, moderate imported inflation and strengthen macroeconomic resilience.
Monetary policy outlook
The June inflation data do not warrant further monetary tightening. Headline inflation has largely stabilised, core inflation continues to moderate and the principal drivers of inflation remain structural rather than demand-induced.
Accordingly, the CPPE expects the Monetary Policy Committee to maintain the current monetary policy stance at its next meeting. The immediate policy priority should be for the monetary authorities to collaborate with the fiscal authorities to accelerate structural reforms that expand food supply, improve logistics, reduce energy and production costs, reduce debt service costs, strengthen domestic value chains and enhance productivity. These measures offer the most sustainable path to lower inflation, stronger growth and improved living standards.
