By David Akinmola
Nigeria’s headline inflation rate may reverse its recent moderation and rise above the 15.43 per cent recorded in July, as analysts warn that persistent food, energy and transportation costs could put renewed pressure on consumer prices when the August inflation figures are released by the National Bureau of Statistics (NBS).
The July inflation rate, which marked a further decline from the previous month, had raised expectations that the country’s disinflationary trend was gaining traction. However, analysts said the moderation may come under pressure from rising costs across key components of household consumption.
According to the analysts, food prices remain a major source of inflationary pressure, particularly as supply disruptions, transportation costs and seasonal factors continue to affect the movement of agricultural produce from farms to markets.
They also identified energy and logistics costs as potential drivers of the August reading, warning that higher operating costs for businesses could continue to filter through to prices of goods and services.
The development could complicate the Central Bank of Nigeria’s (CBN) efforts to consolidate recent gains in price stability, particularly as monetary authorities balance the need to contain inflation with calls for lower interest rates to support economic activity and credit expansion.
Analysts said the sustainability of the recent decline in inflation would depend largely on improvements in food supply, exchange-rate stability and moderation in production and distribution costs.
The naira’s relative stability in the foreign exchange market has helped ease some imported inflationary pressures, but analysts said the impact could be weakened by domestic cost pressures that remain elevated.
They noted that businesses, particularly small and medium-sized enterprises, continue to face high costs of power, transportation, financing and raw materials, making it difficult for them to absorb additional increases without adjusting prices.
The expected August figure is therefore being closely watched by businesses, investors and policymakers for evidence of whether Nigeria’s disinflation process is becoming entrenched or merely experiencing temporary moderation.
A sustained decline in inflation would strengthen the case for further monetary easing and lower borrowing costs, while a renewed increase could constrain the CBN’s room to reduce its policy rate aggressively.
For households, any reversal in the inflation trend would also threaten recent improvements in purchasing power, particularly for lower-income Nigerians who spend a larger share of their earnings on food, transport and other essential items.
Economists have consequently urged the Federal Government to complement monetary measures with policies that address structural supply constraints, reduce logistics costs and improve agricultural productivity.
They said controlling inflation sustainably would require stronger domestic production and more efficient distribution systems rather than reliance on monetary policy alone.
The NBS is expected to provide the official August inflation figure, which will offer a clearer indication of whether the economy has maintained its recent disinflationary trajectory or whether price pressures are beginning to build again.
