The Central Bank of Nigeria (CBN) has reported that the overwhelming majority of Nigerian corporations determine excessive power prices, notably gasoline, diesel, and electrical energy, because the main reason for rising inflation within the nation.
This was disclosed in its Could 2025 Inflation Expectation Survey, which highlights worsening considerations about the associated fee surroundings for companies throughout the nation.
In accordance with the report, 90.8% of respondent corporations ranked power prices as the highest issue contributing to inflation.
This consists of bills on Premium Motor Spirit (PMS), diesel, and electrical energy, reflecting how power provide and pricing stay a core structural problem in Nigeria’s inflation battle.
The consequence affirmed that regardless of the CBN’s tight financial coverage with the Financial Coverage Fee (MPR) at 27.5%, inflation continues to be being pushed predominantly by supply-side pressures, which rate of interest instruments alone could not successfully resolve.
Alternate fee, transport prices, and rates of interest deepen inflation woes
Whereas power ranked highest, different structural and policy-related points had been additionally flagged.
- 88.5% of corporations cited the alternate fee because the second most vital issue influencing inflation, reflecting considerations about forex volatility and the price of imported items. This was adopted by 87.2% of corporations, who recognized transportation prices—together with highway, flight, water, and rail logistics—because the third-highest driver.
- Rates of interest got here in fourth, with 85.5% of corporations believing it’s a main contributor to inflationary strain. This means that whereas the CBN’s financial tightening, elevating the Financial Coverage Fee to 27.5%, was meant to rein in inflation, it could have added to price pressures for companies, particularly these reliant on credit score for operations or growth.
- Different vital drivers included insecurity (84.7%), uncooked materials enter prices (78.3%), and infrastructural challenges (75.0%), all of which ranked excessive amongst agency respondents. Notably, the actions of middlemen (73.0%) and pure disasters (63.4%) had been additionally acknowledged however ranked decrease by way of perceived influence.
- Amongst households, transportation (85.0%) ranked simply behind power because the second-most influential inflationary strain, adopted by alternate fee fluctuations (82.0%), insecurity (80.0%), and rates of interest (78.7%).
The CBN report learn, “Respondents (Companies and Households) recognized power, alternate fee, and transportation as the highest three inflation drivers. Nevertheless, pure disasters, actions of middlemen, and infrastructural challenges had been perceived as much less vital contributors to inflation drivers within the evaluation interval.”
Extra Nigerians say inflation is excessive
- In Could 2025, 75.3% of respondents believed the present inflation fee was excessive, up from 70.0% in April. Notably, households recorded the sharpest enhance, with 79.6% describing inflation as excessive, in comparison with 69.4% the earlier month.
- Companies additionally echoed this sentiment, with 71.5% saying inflation was excessive, a slight enhance from April’s 70.5%. Perceptions of average and low inflation declined throughout the board, reinforcing widespread concern over rising dwelling prices. Additionally, 78.2% of enormous corporations reported excessive inflation, essentially the most amongst enterprise sizes, whereas micro and medium corporations adopted with 72.8% and 70.6%, respectively.
- Households incomes between N30,001 and N100,000 felt inflation the toughest at 82.9%, whereas these incomes above N200,000 had the bottom notion of excessive inflation (65.7%).
- City and rural households each expressed robust inflation considerations, with 79.8% and 79.3%, respectively, describing the present fee as excessive.
Trying forward, 43.1% of households and 29.7% of companies count on inflation to rise in June, whereas 75.1% of companies and 67.1% of households count on their expenditure to extend this month.
Additionally, a majority of respondents (68.9%) need the CBNs to cut back rates of interest, whereas solely 10.9% assist a fee hike and 20.2% choose it stays unchanged.
What you must know
Nigeria’s inflation fee eased to 23.71% in April 2025, down from 24.23% recorded in March, based on the Nationwide Bureau of Statistics (NBS). The determine marks a modest decline of 0.52 share factors, providing a glimmer of hope amid persistent financial challenges and rising cost-of-living pressures throughout the nation.
The most recent CBN report reinforces the argument that Nigeria’s inflation disaster isn’t pushed solely by demand or cash provide, however by persistent structural bottlenecks.
With each corporations and households rating power, transport, and alternate fee points as prime contributors, it’s clear that Nigeria’s inflationary spiral is being fuelled largely by cost-push elements.
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