5 Sectors Accounted for 84% of October’s Inflationary Burden - CPPE

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The Centre for the Promotion of Private Enterprise [CPPE] has pointed out that, despite the overall disinflation report, five sectors accounted for 84 per cent of October’s inflationary burden.

The sectors are food and non-alcoholic beverages; transport; housing, water, electricity, gas and utilities; education; and health.

In a statement on Monday by its Chief Executive Officer, Dr Muda Yusuf, on the latest inflation figures released today, the CPPE stated that these sectors exert the strongest direct impact on citizens’ daily cost of living, making them central to effective inflation management.

Pinnacle Daily reported that the National Bureau of Statistics released the October inflation figure on Monday, November 17.

The report showed headline inflation significantly moderating to 16.02 per cent from 18.02 per cent in September, marking one of the strongest single-month disinflations this year.

This was driven by base effects, exchange rate stability, and improving macroeconomic fundamentals, even as similar moderation was seen across food and core inflation indices.

The CPPE noted, however, that inflationary pressures remain elevated in critical household sectors—including food, transportation, housing, utilities, education, and health—which jointly account for 84% of inflation.

“Persistent structural weaknesses such as high logistics costs, energy challenges, security concerns in food-producing areas, and climate-related disruptions continue to constrain supply and limit the welfare gains of disinflation.

“This policy brief outlines the inflation trends, identifies underlying pressures, and proposes targeted interventions to consolidate disinflation while addressing root causes of cost escalation,” the Centre said.

It stressed that several unresolved structural constraints have continued to limit the speed at which disinflation translates into real price relief, thereby undermining the moderating inflationary pressure.

It pointed out specifically that high transportation costs are resulting from poor road infrastructure, elevated diesel prices and inefficient port operations, while high energy costs are consequences of electricity supply deficits, high energy tariffs, and widespread dependence on generators.

The Centre further noted that the persistent high lending rates and limited access to affordable credit increase production costs across value chains.

Other concerns include flooding, drought, and unpredictable rainfall disrupting agricultural production cycles and reducing food supply; farmer-herder conflicts, banditry, and rural insecurity reducing agricultural output and raising supply chain risks; and low youth engagement in agriculture continuing to constrain productivity and food system resilience.

According to the CPPE, to consolidate the gains of disinflation and ensure real welfare benefits for citizens, a combination of monetary, fiscal, and structural policies is essential.

This includes strengthening food system resilience, reducing transportation and logistics costs, stabilising energy costs, improving access to affordable finance, making housing and utilities more affordable, and enhancing policy synergy.

It reiterated that robust coordination between the Central Bank of Nigeria, the Ministry of Finance, the Ministry of Agriculture, the Ministry of Transport, Customs, and trade agencies is essential to achieve holistic inflation management.

“The sharp moderation in Nigeria’s October 2025 inflation rate represents a significant win for macroeconomic stability. However, the full welfare benefits are yet to be sufficiently felt by households due to persistent structural constraints—especially in food supply, transportation, energy, housing, and essential services.

“To ensure that disinflation translates into real cost-of-living relief, Nigeria must undertake deliberate and sustained reforms across critical sectors. With coordinated monetary, fiscal, and structural policies, the current trajectory can be strengthened, broadened, and sustained,” it added.

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