A new report from the Central Bank of Nigeria (CBN) has revealed that a staggering 90.8% of Nigerian firms consider energy costs—including petrol, diesel, and electricity—as the leading cause of inflation in the country. This finding was disclosed in the bank’s May 2025 Inflation Expectation Survey, signaling deep-rooted concerns about the nation’s economic cost structure.
The survey underscores how structural challenges, such as erratic energy supply and rising fuel prices, are outpacing the effects of monetary tightening. Despite the CBN maintaining a high Monetary Policy Rate of 27.5%, inflation continues to surge, largely fueled by supply-side pressures that interest rate hikes alone may not adequately address.
In addition to energy costs, 88.5% of respondent firms pointed to exchange rate volatility as the second most significant factor influencing inflation. With Nigeria’s currency facing consistent pressure, the cost of imported goods continues to escalate, compounding inflationary trends.
Transportation costs came in third, cited by 87.2% of firms as a major inflationary force. Businesses also highlighted interest rates as a concern, with 85.5% acknowledging it as a factor, though less critical than energy and exchange-related issues.
The CBN’s report sheds light on the complexity of Nigeria’s inflation crisis, highlighting the need for a coordinated mix of fiscal, structural, and monetary interventions to tackle the root causes of rising prices.
