Drop In Inflation Sign Of Macroeconomic Reforms Success—CPPE

Nigeria recorded one of its sharpest disinflation trends of the year in October 2025, with headline inflation easing significantly to 16.02 per cent from 18.02 per cent in September.

The Centre for the Promotion of Private Enterprise (CPPE), in its latest policy brief, said the notable 200-basis-point drop reflected improving macroeconomic coordination, exchange rate stability, and favourable base effects but warned that underlying structural weaknesses continue to undermine real cost-of-living relief for households.

According to the CPPE, the decline in inflation aligns with strengthening policy synergy across monetary, fiscal, and exchange rate management spheres, which has helped moderate imported inflation and boost investor confidence.

Food and core inflation also eased to 13.12 per cent and 18.69 per cent, respectively, driven partly by better FX market liquidity, reduced speculative currency demand, and ongoing reforms.

Despite the positive trajectory, the organisation stressed that inflationary pressures remain elevated in critical household consumption segments.

It noted that food, transportation, housing, electricity, water, education, and health collectively accounted for 84 per cent of the inflationary burden in October, signalling that the welfare effects of disinflation are yet to meaningfully translate into lower living costs for most Nigerians.

CPPE identified several structural constraints that continue to impede faster price relief, including high logistics and transport costs, weak road infrastructure, expensive diesel, inefficient port operations and persistent energy supply challenges.

The organisation added that high lending rates, insecurity in food-producing regions, climate-related disruptions, cross-border smuggling of food items and the ageing farming population continue to exert pressure on supply chains and domestic food availability.

To consolidate the current disinflation trend, the policy brief recommended a mix of monetary, fiscal and structural interventions to stabilise prices sustainably.

It called for strengthened food system resilience through scaled-up irrigation, improved storage and processing infrastructure, and enhanced rural security using community policing and technology-driven surveillance tools.

On transportation, CPPE urged priority rehabilitation of federal and state highways, expansion of freight rail services and streamlining of port clearance processes to reduce logistics bottlenecks.

The organisation also advocated investment in power transmission and distribution, promotion of off-grid renewable solutions for SMEs and rural areas, and incentives for energy-efficient production to stabilise energy costs.

It further recommended improved access to affordable finance through targeted concessional credit schemes, expanded credit guarantees and stronger development finance interventions to support productive sectors.

Addressing pressure in the housing and utilities segment, CPPE encouraged scaling up affordable housing projects through public-private partnerships, improved tariff regulation and expanded metering programmes to curb estimated billing.

It also called for stronger trade policy coordination to reduce illegal food exports, implement smart tariffs that protect domestic supply without triggering price surges and enhance border intelligence to tackle smuggling.

CPPE concluded that while the October inflation performance marks a major step toward macroeconomic stability, sustained reforms across agriculture, energy, logistics, housing and trade are essential to ensure that the gains of disinflation translate into tangible welfare improvements for citizens.

It added that deeper policy synergy among key economic institutions remains critical to broadening and maintaining the downward inflation trajectory.