The Centre for the Promotion of Private Enterprise (CPPE) has expressed concern over renewed inflationary pressures in Nigeria following the release of the March 2026 Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS), warning that the country’s fragile disinflation trend is now under threat.
According to CPPE, while recent months had shown a gradual moderation in year-on-year inflation, the latest figures point to a worrying resurgence driven largely by rising energy, food, and transportation costs. Headline inflation rose to 15.38 percent in March 2026, while month-on-month inflation climbed sharply to 4.18 percent, nearly double the level recorded in February. This, the organisation noted, underscores the vulnerability of the current disinflation trajectory and highlights persistent structural pressures within the economy.
The think tank identified escalating energy costs as a major driver of the renewed inflationary trend. Given Nigeria’s heavy reliance on diesel, petrol, and gas for power generation, logistics, and industrial operations, increases in energy prices are quickly transmitted across the economy. This has led to higher transportation costs, rising food prices, and increased production and distribution expenses, reinforcing a cost-push inflation dynamic that remains largely unresolved.
CPPE further noted that food and transportation continue to dominate inflationary pressures, accounting for an estimated 70 percent of overall price increases when both direct and indirect effects are considered. Food inflation stood at 14.31 percent year-on-year, while core inflation rose to 16.21 percent. These trends are particularly concerning due to their direct impact on household welfare, as both categories represent essential, non-discretionary spending.
The organisation warned that rising transport costs—driven by fuel price increases and logistics inefficiencies—are amplifying inflation across multiple sectors. The higher cost of moving goods and services nationwide is feeding into broader price increases, further intensifying the burden on households.
CPPE highlighted the significant welfare implications of this trend, noting that the dominance of food and transport costs in the consumption basket is eroding purchasing power, increasing the cost of living, and deepening poverty and vulnerability, particularly in rural areas. It also warned of widening inequality across regions and income groups, exacerbated by structural challenges in agricultural productivity and distribution systems.
The policy brief also drew attention to structural weaknesses in Nigeria’s public transportation system, particularly the dominance of private sector operators. According to CPPE, the largely unregulated and highly unionised nature of the sector gives operators considerable pricing power, enabling rapid and often disproportionate fare increases in response to rising fuel costs. This situation, the organisation noted, exposes citizens to price shocks and highlights a critical policy gap in the provision of efficient, affordable, and well-regulated public transportation.
In response to these challenges, CPPE called for urgent and targeted policy interventions, particularly in the areas of agriculture and transportation. The organisation urged governments at both federal and subnational levels to prioritise improvements in agricultural productivity through enhanced security in farming communities, better rural infrastructure, increased access to financing and inputs, and the promotion of mechanisation and modern farming techniques. It stressed that boosting domestic agricultural output remains the most sustainable pathway to moderating food inflation.
On transportation, CPPE advocated significant investments in mass transit systems, including bus and rail networks, alongside the introduction of regulatory frameworks to curb exploitative pricing and improve urban mobility infrastructure. According to the organisation, a more structured and efficient public transportation system would help ease inflationary pressures while improving welfare outcomes.
CPPE also cautioned against further monetary tightening, arguing that the current inflationary pressures are predominantly cost-push in nature rather than demand-driven. It warned that increasing interest rates would not address the root causes of inflation and could instead constrain investment, weaken economic growth, and create additional challenges for the real sector.
Commenting on the development, CPPE Chief Executive Officer, Muda Yusuf, emphasised the need for a broader and more strategic policy response. He noted that while some progress had been made in moderating year-on-year inflation, the resurgence of monthly inflation pressures indicates that underlying structural issues, particularly in energy, food, and transportation, remain unresolved.
He warned that without decisive action to address these supply-side constraints, the gains recorded in inflation moderation could prove temporary, leaving households and businesses to contend with sustained cost pressures.
CPPE concluded that Nigeria’s inflation outlook remains fragile and requires a shift from a narrow reliance on monetary policy tools to a more comprehensive strategy focused on structural reforms. Addressing inefficiencies in critical sectors, the organisation stressed, will be essential to achieving sustainable price stability and improving economic welfare across the country.
