Nigeria’s headline inflation eased to 14.53% in July from 15.91% in June, a movement that signals greater macroeconomic stability but has yet to relieve the country’s severe cost-of-living pressures, Dr Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise, said.
Exchange-rate stability supports disinflation
Yusuf said the latest figures in the National Bureau of Statistics’ Consumer Price Index and inflation report were likely driven mainly by steadier conditions in the foreign-exchange market.
Because Nigeria relies heavily on imports, exchange-rate movements have a significant effect on imported inflation. The relative stability of the naira, including occasional modest appreciation, has therefore helped contain price pressures, strengthened investor confidence and supported investment, he said.
More predictable currency conditions may also have reduced expectations of further price increases. Yusuf said the broader macroeconomic environment was the main factor behind the July slowdown.
Living-cost pressures remain acute
He cautioned, however, that slower inflation does not mean that households are experiencing lower prices. Food, transport, energy and utility expenses remain major sources of pressure, with particularly serious consequences for ordinary Nigerians.
As a result, citizens remain highly exposed even as the pace of price growth moderates, Yusuf said. The easing in the inflation rate has not removed the structural factors driving everyday expenses.
He called for fiscal measures from both the federal and state governments to address food inflation, transport costs, energy prices and utility bills. Such action, he said, is necessary if the improvement in macroeconomic conditions is to translate into better living standards for the wider population.
