The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria’s recent, marginal disinflation gains are highly fragile and face an imminent threat of reversal due to escalating global energy shocks.
In a policy brief released on Sunday, CPPE Chief Executive Officer Dr. Muda Yusuf cautioned that while the February 2026 Consumer Price Index (CPI) report presents a cautiously optimistic outlook, underlying price dynamics and severe structural vulnerabilities leave households and businesses heavily exposed to the ongoing geopolitical crisis in the Middle East.
According to the latest CPI data, Nigeria’s year-on-year headline inflation eased slightly to 15.06 percent in February, down from 15.10 percent in January and marking a significant drop from the 26.27 percent recorded a year earlier.
The CPPE attributed this downward trend to a combination of base effects, sustained monetary tightening, and a general stabilization of macroeconomic conditions.
However, the organization stressed that this headline moderation does not equate to a reduction in the actual cost of living. Underlying metrics paint a more concerning picture, with month-on-month inflation accelerating to 2.01 percent and food inflation surging to 4.69 percent, effectively reversing previous moderations.
The most immediate danger to this fragile economic recovery stems from the intensifying geopolitical tensions involving Iran, Israel, and the United States.
The conflict has already driven global crude oil prices above the $100 per barrel mark, sparking fears of severe disruptions to global supply routes, particularly the Strait of Hormuz.
For Nigeria, the CPPE noted that the transmission of these global shocks is direct and profound. The surge in oil prices is expected to immediately trigger higher domestic petrol and diesel costs, escalating transportation and logistics expenses, rising cross-sector production costs, and renewed pressure on the foreign exchange market.
Nigeria’s exposure to these external energy shocks is deeply magnified by the structural weaknesses inherent in its domestic economy.
The CPPE highlighted the country’s heavy reliance on petrol and diesel for self-power generation, a direct consequence of an unreliable national electricity grid. This dependence creates a swift pass-through effect, transforming global oil price spikes directly into domestic inflation. Current estimates cited by the center reveal that unreliable electricity imposes staggering annual economic losses ranging between ₦7 trillion and ₦10 trillion, alongside more than ₦3.7 trillion spent annually simply to fuel and maintain private generators.
To shield citizens and safeguard enterprise sustainability against this volatile backdrop, the CPPE outlined several urgent policy imperatives for the government.
A primary recommendation is the immediate strengthening of domestic refining capacity. The center urged authorities to guarantee a stable, predictable, and ideally concessionary supply of crude oil to local facilities, including the Dangote refinery. This move is viewed as critical to moderating local fuel prices, easing the intense demand for foreign exchange, and bolstering the nation’s overall energy security.
The CPPE further called on all tiers of government to rapidly scale up investments in efficient, affordable public transportation to provide immediate social protection for households burdened by soaring transit costs.
To reduce the crippling reliance on fossil fuels, the brief advocated for the complete removal of fiscal barriers, such as import duties and taxes, on renewable energy equipment like solar panels, inverters, and batteries.
Additionally, the center recommended a temporary suspension of all maritime charges to offset the steep rise in global marine insurance and shipping costs.
Dr. Yusuf concluded the brief by advising both monetary and fiscal authorities to exercise extreme caution and discipline in the months ahead.
The resurgence of month-on-month inflation, coupled with severe external shocks, indicates that any premature easing of economic policy would carry immense risks.
The CPPE emphasized that any unexpected windfall from the high oil prices must be managed with strict prudence, prioritizing the fortification of foreign exchange reserves and the direct support of the country’s productive sectors.