LCCI Warns Nigeria’s Inflation Relief Is Fragile, Seeks Structural Reforms
The Lagos Chamber of Commerce & Industry (LCCI) has described Nigeria’s latest inflation moderation as a “fragile disinflation,” cautioning that the slowdown reflects temporary and statistical factors rather than deep-rooted structural improvements.
In a detailed assessment of recent price data, the Chamber said the easing trend is largely cyclical, driven by base effects, exchange rate stability and short-term supply improvements, particularly in food markets. It urged policymakers to accelerate supply-side reforms to convert the current relief into durable price stability.
Director-General of the LCCI, Chinyere Almona, said the inflation decline is primarily linked to softer food prices, a more stable exchange rate and steady domestic energy costs. According to her, improved post-harvest conditions and the normalisation of demand after the festive season helped moderate food inflation, while exchange rate stabilisation curtailed imported inflation and reduced pressure on core price metrics.
She added that stable Premium Motor Spirit pricing helped contain transport and logistics costs, collectively easing short-term inflationary pressures and improving inflation expectations among businesses and consumers.
However, Almona cautioned that a significant portion of the year-on-year moderation stems from statistical base effects associated with the rebasing of the Consumer Price Index (CPI), rather than a full resolution of underlying cost pressures. The persistence of core inflation, she noted, underscores entrenched structural challenges including electricity tariffs, transport costs, rising rents and the high cost of imported inputs.
While the improving inflation trend offers the private sector better short-term price predictability and reduced cost volatility, she warned that real inflation remains elevated. High borrowing costs, squeezed profit margins and lingering macroeconomic uncertainty, she said, suggest that businesses should prioritise tactical planning over long-term strategic expansion until a sustained disinflation path is firmly established.
The Chamber called on the government to prioritise reforms in agriculture, logistics, energy and foreign exchange transparency. It also urged monetary authorities to strike a careful balance between inflation control and growth support, warning against excessive tightening that could inadvertently raise real sector costs.
At the same time, the LCCI encouraged the private sector to deepen local sourcing, strengthen supply-chain efficiency and adopt disciplined pricing strategies, while investors were urged to channel capital into food systems, energy production, manufacturing and infrastructure to tackle structural inflation drivers.
Almona concluded that Nigeria’s policy credibility by 2026 will hinge not merely on declining headline inflation figures, but on how effectively the country transitions from cyclical disinflation to sustainable structural price stability anchored on productivity gains, logistics efficiency and coordinated macroeconomic management
