A RENOWNED economist, Muda Yusuf, has said the outlook for Nigeria’s July inflation figures calls for urgency in addressing the enabling business environment in Nigeria.
The report also calls for cautious optimism and the need for the government to focus on prudent management and application of resources in developmental areas.
He further called on the fiscal and monetary authorities to prioritise key policy areas.
Yusuf, who is the Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), said this in a statement on Sunday, August 17.
He said the inflation figures present a mixed outlook for the Nigerian economy, with notable improvements in key indicators but lingering risks that inhibit businesses that demand policy attention.
This, he said, would have policy implications for the authorities, urging them to prioritise key economic parameters.
He noted the key areas to include maintaining calm in the foreign exchange market to anchor inflation expectations, as well as addressing constraints such as high logistics and import costs, insecurity, climate risks, and port inefficiencies that elevate costs and sustain inflation.
Yusuf also recommended prioritising fiscal discipline to ensure prudent government spending and managing liquidity injections effectively to prevent fueling inflationary pressures.
He urged the apex bank to move beyond conventional tightening of the monetary policy tool – the cash reserve ratio (CRR) and financial policy rate (MPR) – toward more creative measures to manage liquidity in the economy, given that the lending rate in the economy had risen above 30 per cent for most businesses.
“The July 2025 inflation report provides a basis for cautious optimism. While progress has been made in moderating headline and core inflation, the persistence of food and month-on-month price increases highlights unresolved structural weaknesses.
“A coordinated mix of monetary, fiscal, and structural interventions will be required to consolidate recent gains and steer the economy toward sustained stability,” Yusuf said.
The ICIR reported that the National Bureau of Statistics (NBS) released the July inflation figures on Friday, August 15, stating that headline inflation dropped to 21.88 per cent.
Highlighting the positive trends, Yusuf noted that headline inflation declined for the fourth consecutive month, easing from 22.22 per cent in June to 21.88 per cent in July, a deceleration of 0.34 per cent.
On a month-on-month basis, food inflation moderated, falling from 3.25 per cent in June to 3.12 per cent in July, while core inflation posted marginal declines on a year-on-year basis at -0.03 per cent and a sharp slowdown on a month-on-month basis, from 3.46 per cent to 0.97 per cent.
These developments reflect a gradually stabilising macroeconomic environment, supported by exchange rate stability, improved investor confidence, and the lingering impact of import duty waivers on key staples such as rice, maize, and sorghum.
“The base effect, given the high inflationary conditions in 2022, has also been a strong factor in the recent downward trend,” Yusuf stated.
He expressed, however, that despite the gains, emerging concerns are that pressures persist.
“Month-on-month headline inflation rose from 1.68 per cent in June to 1.99 per cent in July, while year-on-year food inflation increased from 21.97 per cent to 22.74 per cent.
“These movements underscore the continuing vulnerability of the economy to supply-side shocks,” he added.