By Seun Ibiyemi
The Centre for the Promotion of Private Enterprise (CPPE) has warned that rising geopolitical tensions in global energy markets could undermine Nigeria’s recent progress in easing inflation, posing fresh risks to households and businesses.
In its February 2026 inflation policy brief, the Chief Executive Officer, CPPE, Dr. Muda Yusuf noted that while headline inflation showed a marginal decline to 15.06 per cent year-on-year, the improvement remains fragile amid mounting external and domestic pressures.
The organisation highlighted that the escalation of geopolitical tensions in the Middle East particularly involving Iran, Israel and the United States has triggered a sharp rise in global crude oil prices, now exceeding $100 per barrel.
This development, it said, presents a clear inflationary threat to Nigeria’s economy.
According to the CPPE, the transmission effects of higher oil prices are already evident in increased petrol and diesel costs, rising transportation and logistics expenses, and elevated production costs across various sectors.
The group also warned of renewed pressure on the exchange rate and further escalation in food prices driven by higher input and distribution costs.
“The current geopolitical energy shock poses a significant risk to Nigeria’s inflation outlook, with the potential to reverse recent gains and deepen pressures on households and businesses,” the policy brief stated.
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Despite the slight easing in headline inflation, the CPPE stressed that underlying price pressures remain strong.
Month-on-month inflation rose to 2.01 per cent, while food inflation surged to 4.69 per cent, reflecting persistent cost-of-living challenges.
The think tank further noted that Nigeria’s structural vulnerabilities, particularly its heavy reliance on petrol and diesel for power generation due to unreliable electricity supply amplify the impact of global energy shocks.
It estimated that poor electricity supply costs the economy between ₦7 trillion and ₦10 trillion annually, while spending on generators exceeds ₦3.7 trillion.
For businesses, especially small and medium enterprises, the CPPE said the rising cost environment is squeezing profit margins and weakening viability. Households, on the other hand, continue to face declining purchasing power amid rising food, energy and transport costs.
To mitigate the impact, the organisation called for urgent and coordinated policy measures, including strengthening domestic refining capacity, improving electricity supply, and removing fiscal barriers to renewable energy adoption.
It also urged government investment in affordable public transportation and the suspension of certain maritime charges to ease logistics costs.
The CPPE cautioned monetary and fiscal authorities against premature policy easing, noting that the resurgence in monthly inflation and the emergence of external shocks require disciplined and proactive economic management.
It concluded that while Nigeria has made some progress in curbing inflation, the evolving global energy landscape demands swift policy action to safeguard macroeconomic stability and protect citizens from worsening economic conditions.
