Nigeria’s inflation illusion—The price of governance failures

Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) has once again attempted to treat the symptoms of its deep-rooted inflation crisis, this time offering traders and market stakeholders a one-month moratorium on exploitative pricing. The announcement by the newly appointed executive vice-chairman, Tunji Bello, highlights a glaring issue: the government continues to misdiagnose the real causes of the country’s economic woes.

While the FCCPC’s concern over price discrepancies—such as the wildly inflated cost of a Ninja fruit blender in Lagos compared to Texas—may stir public frustration, the focus on individual cases of price gouging obscures the broader problem. Nigeria’s inflationary crisis is not primarily driven by opportunistic traders, but by a set of economic policies that have systematically undermined the country’s stability. The government’s inability to address core issues such as failing infrastructure, insecurity, and a volatile currency is the true driver of the rampant price increases plaguing consumers.

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Nigeria’s market dynamics are being strangled by multiple systemic issues: exorbitant transport costs driven by poor infrastructure, insecurity that disrupts supply chains, excessive taxation at multiple levels, and opaque regulatory environments. The government’s heavy-handed economic interventions, including Tinubu’s economic reforms, have compounded these problems, inflating the costs of doing business and driving up the prices of everyday goods. These are structural challenges that cannot be resolved by moral appeals for patriotism from traders.

While Nigeria’s National Bureau of Statistics reports a minor reduction in headline inflation—from 34.19 percent in June to 33.40 percent in July—these figures provide little comfort to ordinary Nigerians. The modest drop in the price of items such as garri and tomatoes has been more than offset by stubbornly high prices for staples like rice, beans, and bread. For millions of households, this modest deflation is nothing more than an illusion. Consumers continue to feel the brunt of price pressures, as their purchasing power is steadily eroded by the broader inflationary environment.

 “The government’s inability to address core issues such as failing infrastructure, insecurity, and a volatile currency is the true driver of the rampant price increases plaguing consumers.”

More troubling is the government’s reluctance to tackle the real causes of inflation. Structural problems in the agricultural sector, exacerbated by poor weather and supply chain bottlenecks, mean that food prices will remain elevated in the near term. Insecurity and a lack of investment in infrastructure continue to hinder the flow of goods from farm to market, driving up transportation costs. Compounding these issues are the rising costs of energy and labour, which place additional pressures on businesses and are ultimately passed on to consumers.

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The FCCPC’s call for cooperation from market stakeholders rings hollow in a country where the government itself is often the biggest barrier to economic stability. Rather than offering another round of superficial solutions and moralising about patriotism, the authorities should focus on implementing targeted, effective reforms. This includes addressing inefficiencies in the supply chain, rationalising the tax system, and improving infrastructure to reduce transport costs. Without these changes, Nigeria will remain trapped in a cycle of rising prices and economic stagnation.

Nigeria’s inflation crisis is a symptom of deeper policy failures. Addressing it requires a comprehensive strategy that goes beyond temporary price controls and moratoriums. If the government fails to act, the price for ordinary Nigerians will continue to rise—not just at the checkout counter, but in terms of lost economic potential and social stability.