The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has linked Nigeria's persistent rise in headline inflation to the ongoing Middle East crisis. Reacting to the May 2026 inflation figures released by the National Bureau of Statistics (NBS) on Monday, Yusuf stated that the uptick appears to be driven more by external shocks and domestic structural challenges than by internal macroeconomic instability.
Inflation Data for May 2026
The NBS reported an inflation rate of 15.93 per cent for May, up from 15.69 per cent in April. Food inflation also rose to 16.96 per cent in May, compared to 16.06 per cent in the previous month. Yusuf noted that the marginal increase of 0.24 per cent in headline inflation reflects the continuing impact of geopolitical tensions in the Middle East on global energy markets and supply chains.
Impact of Geopolitical Tensions
According to Yusuf, the surge in crude oil prices, elevated marine insurance costs, disruptions to shipping routes, and higher import costs have all combined to exert upward pressure on domestic prices. He emphasized that the government's policy priority should be to tackle the structural cost drivers of inflation, particularly insecurity, food supply constraints, transportation costs, and energy prices.
“These are the pressure points that matter most to citizens’ welfare and business competitiveness,” he said.
Key Drivers of Inflation
Yusuf highlighted that the major drivers of inflation remain food and beverages, transportation, housing, energy, health, and education. These sectors collectively account for about 87 per cent of headline inflation. He stressed that the inflation burden is concentrated in the basic necessities consumed by ordinary Nigerians.
“Food inflation at 16.96 per cent remains particularly concerning, as it continues to outpace headline inflation and weaken household purchasing power,” he added.
Structural Factors Behind Food Inflation
Yusuf pointed out that a major structural factor behind elevated food prices is the persistent insecurity in key food-producing regions. This has displaced farming communities, reduced cultivated acreage, disrupted agricultural supply chains, and increased transportation costs. The consequence is lower agricultural output and tighter food supply, which continue to fuel food inflation.
“Therefore, tackling insecurity is not only a security imperative; it is also a critical inflation-management strategy,” he said.
Policy Recommendations
The CPPE boss noted that the inflation challenge remains largely cost-push in nature, and the solution lies less in monetary tightening and more in addressing the structural drivers of production and distribution costs. He called for government intervention to focus on improving food security, strengthening logistics infrastructure, investing in mass transit and rail transportation, enhancing energy security, and restoring safety in farming communities.
Yusuf also expressed cautious optimism following the recent diplomatic breakthrough in the Middle East and the moderation of crude oil prices from about $90 per barrel to approximately $83 per barrel. He concluded that if geopolitical tensions continue to ease and supply chain conditions improve, inflationary pressures could begin to moderate from the third quarter of 2026.
