The Central Bank of Nigeria (CBN) has issued a warning over a potential rise in inflation, citing increasing input costs across key sectors of the economy.
According to the CBN’s June 2025 Purchasing Managers’ Index (PMI) report, the input prices in the industry, services, and agriculture sectors are rising faster than output prices. This imbalance, the bank says, could lead to inflationary pressure in the near future if businesses begin passing these costs on to consumers.
“A persistent gap between input and output prices raises concerns about a possible pass-through to final consumer prices,” the report noted. “If this continues, headline inflation could rise in the coming months.”
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The agriculture sector was identified as the most affected, recording the highest input-output price gap of +9.8 index points. This suggests that farmers and agribusinesses are currently absorbing cost increases rather than transferring them to buyers — a trend that may be unsustainable.
Despite the cost pressures, the Nigerian economy maintained its positive momentum, with the composite PMI standing at 52.3 points. This marks six consecutive months of economic expansion, with industry (51.9), services (54.2), and agriculture (51.0) all remaining in growth territory.
However, the CBN emphasised that rising production costs, if left unchecked, could erode business margins and spark renewed inflation. This warning comes at a time when Nigeria is already facing challenges related to food prices and currency depreciation.
Economists suggest that the central bank may consider additional policy measures if inflationary pressures intensify in the second half of 2025.
