Tackling Insecurity, Boosting Agriculture Key To Sustaining Inflation Decline – Economist

The Centre for the Promotion of Private Enterprise (CPPE) has identified insecurity, high logistics costs and weak agricultural productivity as critical challenges that must be addressed to achieve long-term price stability and a sustained reduction in inflation in Nigeria.

The director/chief executive officer of CPPE, Dr Muda Yusuf, said curbing structural cost pressures, strengthening support for agricultural producers and improving the credibility of inflation data are essential steps for stabilising the economy.

While acknowledging Nigeria’s recent progress in moderating inflation, the chamber stressed the need for deliberate and strategic actions to sustain the gains. It noted that recent government reforms, including the removal of fuel subsidies and the unification of the foreign exchange rate, have played a significant role in stabilising the naira and improving investor confidence.

According to Dr Yusuf, Nigeria’s inflation rate declined to 15.15 per cent in December 2025, extending the disinflation trend recorded over the past year.

“Nigeria’s inflation fell to 15.15 percent in December 2025, continuing a disinflation trend over the past year. This improvement has largely resulted from declining food prices, offering some relief to households,” he said.

However, CPPE warned that without sustained efforts to address insecurity, reduce logistics and transportation costs, and boost agricultural output, the current gains in inflation control may be difficult to maintain.

He also pointed out that new methods for calculating the Consumer Price Index (CPI) have raised questions regarding the credibility of inflation statistics, although these changes have not significantly impacted the overall disinflation trend.

According to Yusuf, despite these positive developments, the persistent structural drivers of high costs, including energy, transportation, logistics, and insecurity remain challenges that need to be addressed. Moreover, the decrease in food prices raises concerns about the sustainability of farmers’ investments, as their returns can be significantly eroded. It is crucial to prioritise policies that simultaneously support consumer affordability and ensure investment viability for producers.

Yusuf stressed the importance of targeted food security policies, reducing housing costs, and enhancing mass transit systems to confront these challenges effectively.

He added that “while consumers benefit from lower food prices, the declining incomes of farmers amid rising input costs may discourage vital agricultural investments and jeopardize long-term food security.”

He proposed that “policy solutions should focus on reducing the costs of fertilizers, agrochemicals, and machinery, expanding irrigation and mechanisation support, and establishing a minimum guaranteed pricing framework for staple crops. These measures would bolster farmers’ confidence in the profitability of their investments while ensuring affordable prices for households.

He advocated for closer collaboration between fiscal and monetary authorities, asserting that structural interventions should complement monetary policies to lower inflation without undermining production capabilities.

For the government, Yusuf recommended “intensifying efforts to reduce food, transportation, and utility costs, addressing insecurity to enhance agricultural supply, and providing support for farmers through lower input costs and guaranteed minimum pricing for key crops. Additionally, lowering import duties on manufacturing inputs and reinforcing fiscal-monetary policy coordination would contribute to a more resilient economy.”

He encouraged the National Bureau of Statistics to strengthen its institutional capacity for accurate data collection and quality assurance, improve technical and analytical rigor in CPI computations, and work towards rebuilding public and investor trust in statistical outcomes.