CBN Survey Reveals Root Causes of Persistent Inflation in Nigeria

A new report by the Central Bank of Nigeria (CBN) has identified insecurity, exchange rate volatility, and rising energy costs among the leading factors driving persistent inflation in the country. The findings are contained in the bank’s Inflation Perception Report for April 2025.

The report highlights how rising prices of petrol, diesel, electricity, and other energy sources are contributing to the continued upward pressure on inflation. Other key drivers cited include high transportation costs—across road, rail, air, and water—interest rates, the activities of middlemen, raw material shortages, infrastructure deficits, natural disasters, and the wider impact of insecurity on business operations and daily life.

This comes as Nigeria continues to grapple with a sharp rise in inflation, which has significantly eroded purchasing power and increased the cost of living. The National Bureau of Statistics (NBS) recently reported that headline inflation rose to 24.23% in March 2025, up from 23.18% recorded in February. Month-on-month data showed a notable increase of 1.05%, with price levels accelerating by 3.90% in March compared to 2.04% in February.

Amid these economic challenges, labour leaders have raised concerns about the diminishing value of wages. Joe Ajaero, President of the Nigerian Labour Congress (NLC), expressed concern over the impact of inflation on the newly approved ₦70,000 minimum wage. Speaking at the Trade Union Congress (TUC) delegates’ conference in Abuja, Ajaero argued that rising electricity tariffs and excessive taxation have undermined the wage increase, calling on labour unions to reassess their strategies and alliances.

He stressed the need to examine how the minimum wage is implemented and its relevance to the actual cost of living. Ajaero noted that many workers are unable to meet basic needs as rent, transport, and utility costs continue to rise. He urged organised labour to strengthen ties with civil society and other stakeholders to collectively address the worsening economic situation affecting Nigerian workers.