The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that persistent increases in food prices and month-on-month inflation continue to expose structural weaknesses in Nigeria’s economy, despite a steady decline in headline inflation.
CPPE’s Director/CEO, Dr. Muda Yusuf, reacting to the July 2025 inflation report on Sunday, described the trend as a “mixed outlook” that requires caution and sustained reforms.
He noted that headline inflation fell for the fourth straight month, easing from 22.22% in June to 21.88% in July — a slowdown of 0.34 percentage points. Food inflation on a month-to-month basis also moderated slightly from 3.25% in June to 3.12% in July, while core inflation recorded both annual and monthly declines.
According to Yusuf, the improvements were largely driven by exchange rate stability, stronger investor confidence, and government waivers on import duties for staples such as rice, maize, and sorghum. He added that base effects from the high inflationary environment of 2022 also contributed to the downward trend.
However, he warned that underlying risks persist. Month-on-month headline inflation accelerated from 1.68% in June to 1.99% in July, while annual food inflation climbed from 21.97% to 22.74%.
“These shifts highlight the economy’s continued exposure to supply-side shocks,” he said.
On the policy front, Yusuf urged the government to sustain reforms and ensure stability in the foreign exchange market to anchor inflation expectations. He also stressed the need for structural measures to tackle high logistics costs, insecurity, climate risks, and inefficiencies at the ports.
“The outlook calls for caution and sustained reforms,” he added. “Fiscal discipline is critical to avoid excessive liquidity that could reignite inflationary pressures, while monetary authorities must innovate beyond conventional tightening measures such as CRR and MPR, as lending rates have already surpassed 30% for most businesses.”
While acknowledging progress in moderating headline and core inflation, Yusuf emphasised that the persistence of food price hikes and monthly inflation points to deeper economic challenges.
“The July 2025 inflation report offers cautious optimism,” he said. “But only a coordinated blend of monetary, fiscal, and structural policies can consolidate these gains and steer the economy toward lasting stability.”
