• Manufacturers lament forex, interest rate challenges
• Rising energy cost crippling businesses, CPPE claims

Although inflation saw a slight drop from 24.23 per cent to 23.71 per cent in April, the burden of high prices, especially food items, remains a pressing concern for millions of Nigerian households.

Having a decent meal, especially a balanced diet, has remained the exclusive preserve of the very rich in the country, despite fiscal and monetary measures aimed at cooling the price crisis.

Insecurity, inaccessible loans, poor road network and other structural defects continue to affect production.

While the April consumer price index (CPI) released yesterday by the National Bureau of Statistics (NBS) showed that inflation dropped by 0.52 per cent, high prices are still a major challenge for households, making basic items unaffordable to many households.

A consumer report carried out by SEID recently said close to 50 per cent of Nigerians spend 100 per cent of their income on food, leaving education, health and other consumption items unattended to.

While the CPI report claimed the slowdown was most noticeable in food inflation, which has been a major driver of the country’s rising cost of living, market checks showed food prices are still very high.

On a month-on-month basis, food inflation dipped from 2.18 per cent in March to 2.06 per cent in April, marking a 0.12 percentage point decrease.
NBS attributed the moderation primarily to falling prices of basic food items such as maize flour, wheat grain, dried okro, yam flour, soya beans, rice, bambara and beans.

The data come against the backdrop of a major change in the CPI methodology. In January 2025, the NBS rebased the CPI, updating the base year to 2024 and using 2023 as the reference year for expenditure weights. While the intention was to reflect changing consumption patterns, the rebasing has drawn scrutiny.

The change reduced the weight of domestically consumed goods, increased the proportion of services and altered the overall price basket, thereby limiting comparability with previous figures.

In its May 2025 Nigeria Development Update, the World Bank noted that the rebasing has complicated the interpretation of inflation trends.

Despite the reported easing, the Bank warned that price pressures remain elevated. “Re-anchoring inflation expectations will require sustained monetary policy efforts,” it stated.

While the month-on-month decline in food inflation may partly reflect the arrival of grain imports under last year’s duty waiver scheme, the root cause of high food prices remains unaddressed, stakeholders have warned.
Insecurity in key agricultural regions, limited access to inputs and financing, and soaring transport costs continue to weigh heavily on food supply and distribution.

In the manufacturing sector, many producers are struggling with collapsing demand due to rising production costs and shrinking consumer purchasing power.

According to the Second Half Economic Review 2024 by the Manufacturers Association of Nigeria (MAN), the value of unsold finished goods surged to N2.14 trillion, an 87.5 per cent increase, signalling a deepening crisis in consumer demand and operational viability.

A major driver of this crisis is the high cost of inputs, particularly imported raw materials.

Energy costs have also spiked significantly. MAN reports that spending on alternative energy rose by 42.3 per cent in the second half of 2024, reaching N1.11 trillion, up from N781.68 billion in 2023.

These are legacy issues, experts said must be addressed to ease inflation.
Stakeholders told The Guardian that the FX crisis and interest rate would continue to affect the real sector, including agriculture, and raise inflationary pressure.

They suggested a temporary subsidy for public transportation and other essential services to reduce consumer costs.

Over the past 10 years, Nigeria’s inflation rate has steadily climbed, rising from an average of 8.0 per cent in 2014 to 24.7 per cent in 2023, before hitting 34.8 per cent in December 2024. This steep trajectory underscores the scale of Nigeria’s cost-of-living crisis and the limited impact of various inflation-targeting measures implemented over the years.

Since assuming office in late 2023, Central Bank Governor, Olayemi Cardoso, has adopted an aggressive monetary policy stance. Between February 2024 and February 2025, the Central Bank’s Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MPR) by a cumulative 875 basis points, bringing the benchmark interest rate to 27.5 per cent.

In October 2024, the NBS justified its decision to rebase the CPI because Nigeria’s consumption patterns had shifted significantly since the last rebasing exercise in 2009. While some early effects of economic reforms may be emerging through slightly lower inflation readings, analysts argue that more targeted interventions are needed to achieve sustained relief.

Experts suggested that addressing structural bottlenecks in the services sector, particularly in transportation and telecommunications, could have a significant impact on inflation. Reviewing pricing regulations, they say, could help foster greater competition and reduce consumer costs.

They also recommend incentivising market entry for new players through reduced regulatory barriers and tax incentives, which could promote competitive pricing and service improvements.

Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, identified foreign exchange volatility and high interest rates as key factors inflating manufacturers’ costs.

He stressed the urgent need to address energy costs, which he described as “crippling”. He advocated for a lower interest rate environment to ease access to financing for producers and service providers such as those in the telecom industry.

Despite marginal declines in fuel prices, transportation costs, a major component of inflation, remain stubbornly high. Logistics expenses are routinely passed on to consumers, inflating retail prices across sectors.

Further compounding the problem, the telecommunications industry recently secured approval to raise tariffs by 50 per cent, citing operational cost pressures. The ripple effect has been immediate, with service providers reliant on internet infrastructure also increasing their charges.

Prof. Godwin Oyedokun of Lead City University, Ibadan, said: “Encouraging the use of locally sourced products and services could also help reduce dependence on costlier imports, which are vulnerable to currency fluctuations.”

He further advocated for temporary subsidies on public transport and essential services to ease the burden on consumers.

“A mix of these strategies could help ease inflationary pressures in the services sector, while ensuring service quality is not compromised,” he noted.