Middle East Tensions Driving Nigeria’s Inflation Uptick, CPPE Warns

CPPE links May’s inflation rise to Middle East tensions but says price pressures are easing.

The Chief Executive Officer of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has stated that the marginal increase of 0.24 per cent in headline inflation from 15.69 per cent in April 2026 to 15.93 per cent in May 2026, reflected the continuing impact of recent geopolitical tensions in the Middle East on global energy markets and supply chains.

Yusuf, who said this on Tuesday , noted that the surge in crude oil prices, elevated marine insurance costs, as well as disruptions to shipping routes and higher import costs have all combined to exert upward pressure on domestic prices.

He, however, said that beneath the year-on-year increase lies a more encouraging trend as headline inflation moderated on a month-on-month basis from 2.13 per cent in April to 1.75 per cent in May, while food inflation eased from 3.63 per cent to 2.98 per cent.

“This suggests that although inflationary pressures persist, the pace of price escalation is slowing.

“It is also noteworthy that the current inflation rate remains significantly below the 26.06 per cent recorded in May 2025, underscoring the substantial disinflation achieved over the past year,” Yusuf said.

According to him, food and beverages, transportation, housing, energy, health and education remained the major drivers of inflation rem, which collectively account for about 87 per cent of headline inflation.

“This highlights the reality 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.

Yusuf said the major structural factor behind elevated food prices was the persistent insecurity in key food-producing regions.

According to him, “insecurity 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.”

The CPPE noted that inflation challenge still remained largely cost-push in nature and remarked that, “the solution lies less in monetary tightening and more in addressing the structural drivers of production and distribution costs.”

According to the organisation, government’s intervention should 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 stated that 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 provided grounds for cautious optimism.

He said: “If geopolitical tensions continue to ease and supply chain conditions improve, inflationary pressures could begin to moderate from the third quarter of 2026.

“For now, the inflation uptick appears to be more of an external shock phenomenon and domestic structural headwinds than a reflection of domestic macroeconomic instability.

“The policy priority should therefore 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.”