Despite headline inflation cooling to 15.06%, rising fuel costs and geopolitical tensions could reverse progress, warns CPPE CEO Dr. Muda Yusuf….
Nigeria’s headline inflation eased marginally in February 2026, falling to 15.06% year-on-year, down from 15.10% in January and far lower than last year’s 26.27%, according to a statement by, CEO of the Centre for the Promotion of Private Enterprise (CPPE) Dr. Muda Yusuf on March 22, 2026.
“The February CPI report shows some progress in slowing price growth, but underlying inflationary pressures remain strong,” Yusuf said. “Month-on-month inflation actually rose to 2.01%, and food inflation jumped to 4.69%, reversing the moderation we had seen previously. This signals that the cost-of-living pressures remain very real for households.”
Rising Costs Strain Households and Businesses
Yusuf noted that persistent increases in food, transport, and energy costs are eroding purchasing power, particularly among vulnerable and urban households.
“For businesses, especially SMEs, the environment is extremely challenging,” he said. “High energy, logistics, and raw material costs are tightening profit margins, while weak consumer demand limits pricing flexibility. Many consumer-focused companies are facing declining profitability and rising vulnerability.”
Geopolitical Energy Shocks Pose Risks
The CPPE chief warned that ongoing tensions in the Middle East, involving Iran, Israel, and the United States, are likely to drive inflation higher. Crude oil prices have surged above $100 per barrel, with disruptions to energy infrastructure and shipping routes, including the Strait of Hormuz.
“These developments have a direct effect on Nigeria,” Yusuf said. “Fuel prices are rising, transportation costs are increasing, production costs are climbing, and food prices are being pushed up. If these external pressures persist, the current disinflation trend could quickly reverse.”
Structural Challenges Worsen Impact
Nigeria’s dependence on petrol- and diesel-powered electricity generation compounds the problem. Yusuf highlighted that unreliable power supply costs the economy between ₦7 trillion and ₦10 trillion annually, while spending on generators exceeds ₦3.7 trillion a year.
“This structural reliance means that energy price shocks immediately translate into higher transport, production, and general consumer prices,” he said.
Policy Recommendations
To mitigate the risks, Yusuf called for urgent and coordinated action:
- Strengthen domestic refining capacity, including stable supply to the Dangote Refinery, to ease fuel price pressure.
- Invest in public transport to reduce household transport costs.
- Promote renewable energy adoption by removing taxes and duties on solar equipment, inverters, and batteries.
- Improve electricity infrastructure for reliable power supply.
- Encourage flexible work arrangements where possible to reduce commuting costs.
- Maintain fiscal and monetary discipline, particularly in managing oil revenue windfalls.
Conclusion
While Nigeria’s February inflation figures show some progress, Yusuf warned that the improvement is fragile. “The combination of global energy shocks and domestic structural vulnerabilities poses a real risk to households and businesses. A proactive, forward-looking policy response is essential to safeguard macroeconomic stability, protect citizens, and support enterprise resilience,” he said.
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