How to sustain inflation gains — Experts
Foremost economist, Dr. Muda Yusuf has welcomed the August inflation report released by the National Bureau of Statistics on Monday, saying the continued downward trend for the fifth consecutive time in 2025 must be sustained through further stability in exchange rate. He spoke in response to the report which showed that inflation dropped to 20.12 […]
Foremost economist, Dr. Muda Yusuf has welcomed the August inflation report released by the National Bureau of Statistics on Monday, saying the continued downward trend for the fifth consecutive time in 2025 must be sustained through further stability in exchange rate.
He spoke in response to the report which showed that inflation dropped to 20.12 per cent in the month of August.
The report said food inflation also dropped to 1.65 per cent when compared to the 3.12 per cent recorded in the month of July.
It attributed the decline to the drop in the average prices of rice (imported), rice (local), guinea corn flour, maize flour sold loose, guinea corn (sorghum), millet, Semolina, Soya milk etc.
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The report added that the August figure was a 1.76 per cent drop when compared to the inflation rate of 21.88 percent in July.
Daily Trust reports that this will be the fifth consecutive decline since April.
Yusuf, who is Chief Executive Officer, Centre for the Promotion of Private Enterprises (CPPE), in a policy brief on the inflation figure explained that inflation rate eased to 20.12%, down from 21.88% in July — a notable 1.76 percentage point decline.
“Month-on-month inflation also slowed sharply, with prices rising by just 0.74% in August compared with 1.99% in July — one of the lowest sequential increases in over a year,” he said.
He stated that several factors underpin the continued deceleration in inflation which include the base effect from the unusually high inflation rates recorded in 2024
Also, stabilization of the foreign exchange market, which has reduced imported inflation and improved business confidence was another factor, adding that improved agricultural production from sub-national government interventions, helping to boost food supply and contain price spikes is also another issue.
He stated that to consolidate and build on these gains, a coherent mix of fiscal, monetary, and structural reforms will be critical.
The economist urged authorities to continue stabilizing the exchange rate; deepen fiscal consolidation to curb deficits and manage public debt prudently and collaborate with state governments to remove productivity constraints.
He stated that government must invest in infrastructure, logistics, and security to improve output and reduce costs
We must moderate money supply growth through tighter monetary-fiscal coordination and align fiscal, tax, and trade policies to reduce production and operating costs across sectors, he stated.
In addition, he stated that the implementation of targeted interventions such as input subsidies, storage facilities, and mechanization programs to lower food production costs and ease pressure on household budgets must be sustained.
“If these measures are sustained, Nigeria could witness a further decline in inflation, a gradual rebound in consumer confidence, and stronger foundations for inclusive and sustainable economic growth,” he added.
Stating that reduction in inflation is not the same as price reduction, he added, “What we need are specific, targeted policies to deal with the issue of the cost of living, and this will involve a combination of policies – fiscal, monetary, investment, trade, tariffs, activities, all these policies.”
Another analyst, Dr. Ango Malari, expressed concerns over the high rate of food inflation. He also echoed the sentiments that MPR should be reduced to “stimulate investor confidence.”