![[VIDEO] Nigeria’s Current Inflation Rate Is Not Straightforward — Economist](/wp-content/uploads/2025/10/Nigeria-stagflation-complicates-economic-recovery.png)
Development economist Professor Ken Ife describes Nigeria’s inflation as a complex case of stagflation. He says the country is facing a rare economic condition in which multiple forms of inflation occur simultaneously, making recovery difficult. This assessment comes as Nigeria’s inflation rate fell for the sixth consecutive month, reaching 18.02 percent in September—the lowest level in more than three years.
According to Professor Ife, Nigeria is experiencing all four types of inflation at the same time: demand‑pull inflation, cost‑push inflation, imported inflation, and inflation driven by regional food demand and currency devaluation. Demand‑pull inflation is fueled by excess liquidity and massive cash flows chasing a limited supply of goods and services. Although monetary authorities have tried to curb liquidity through inflation‑targeting policies, the problem persists because the money in circulation is not backed by productivity gains.
Cost‑push inflation, by contrast, stems from rising transportation, energy, and security costs, which raise the price of producing and distributing goods, especially food. Imported inflation is another major driver; Nigeria’s heavy reliance on imports makes it vulnerable to global disruptions such as the COVID‑19 pandemic and the Russia‑Ukraine crisis. The fourth factor, less often discussed, originates from regional food demand and currency devaluation. Nigeria’s food exports to neighboring countries—particularly Niger, Chad, and Mali—have intensified domestic food inflation because exchange‑rate differentials allow traders to earn profits of up to 200 percent, putting additional pressure on local food prices.
Although food inflation has recently eased slightly due to increased imports, the underlying structural problems—weak production capacity, a fragile currency, and dependence on imports—remain unresolved. The complexity of Nigeria’s inflation underscores the need for policymakers to tackle these root causes. Even with a modest decline, inflation stays high, so the government must adopt policies that boost productivity, reduce import dependence, and strengthen the currency. Such measures would alleviate pressure on domestic food prices and mitigate inflation’s broader impact on the economy.
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