…Says July Inflation Presents Mixed Outlook
The Centre for the Promotion of Private Enterprise (CPPE), a leading advocacy group committed to private sector sustainable growth in Nigeria, has charged the Federal Government to adopt coordinated mix of monetary, fiscal, and structural interventions in order to consolidate the recent gains of its reform measures and position the economy on the path of sustainable stability in the years ahead.
The Director/CEO of the Centre, Dr. Muda Yusuf, in a note issued yesterday on the just published Inflation Rate for July 2025 noted that the inflation figures presented a mixed outlook for the Nigerian economy, with notable improvements in some key indicators but lingering risks that demand policy attention.
On the positive trends of the Consumer Price Index (CPI) published by the National Bureau of Statistics (NBS) last Friday, the Centre recalled that the Headline inflation declined for the fourth consecutive month, easing from 22.22% in June to 21.88% in July, representing a deceleration of 0.34%.
- Advertisement -
It noted that month-on-month, the food inflation also moderated, falling from 3.25% in June to 3.12% in July, while core inflation posted marginal declines year-on-year (-0.03%) and a sharp slowdown month-on-month, from 3.46% to 0.97%.
According to the CPPE, these developments reflect a gradually stabilizing macroeconomic environment, supported by exchange rate stability, improved investor confidence, and the lingering impact of import duty waivers on key staples such as rice, maize, and sorghum.
This is even as it pointed out that the base effect, given the high inflationary conditions in 2022, had also been a strong factor in the recent downward trend.
The Centre maintained that despite these gains, pressures persist as month-on-month headline inflation rose from 1.68% in June to 1.99% in July, while year-on-year food inflation inched up from 21.97% to 22.74%, adding that these movements underscore the continuing vulnerability of the economy to supply-side shocks.
On the policy implications of the latest general price level in the economy, the OPS advocacy group maintained that the outlook called for caution and sustained reforms.
It listed the key priorities for government to focus on as including Foreign exchange stability, which requires maintaining calm in the FX market to anchor inflation expectations; and Structural reforms to address constraints such as high logistics and import costs, insecurity, climate risks, and port inefficiencies that elevate costs and sustain inflation.
Others are Fiscal discipline, by ensuring prudent government spending and managing liquidity injections effectively to prevent fueling inflationary pressures; and Monetary innovation by moving beyond conventional tightening tools (CRR, MPR) toward more creative measures to manage liquidity in the economy, given that the lending rate in the economy had risen above 30% for most businesses.
The CPPE, in its concluding remarks on how to leverage the potential gains of the government’s reforms to economic benefits, canvassed: “The July 2025 inflation report provides a basis for cautious optimism. While progress has been made in moderating headline and core inflation, the persistence of food and month-on-month price increases highlights unresolved structural weaknesses. A coordinated mix of monetary, fiscal, and structural interventions will be required to consolidate recent gains and steer the economy toward sustained stability.”
