CBN: 71% of middle-income Nigerians feel inflation, tax hits....

Nigeria’s economic squeeze is deepening across households and businesses, with 71 per cent of Nigerians earning between N150,001 and N250,000 reporting high inflation, while 70.8 per cent of businesses identify high and multiple taxation as their biggest operating challenge, fresh Central Bank of Nigeria (CBN) surveys have shown.

The twin findings, contained in the CBN’s July 2026 Inflation Expectations Survey and Business Expectations Survey, highlight the persistent pressure on household purchasing power and business profitability despite recent improvements in headline inflation and foreign exchange expectations.

The Inflation Expectations Survey showed that the Inflation Perception Index stood at 40.0 points in July, indicating that households continued to perceive the prices of goods and services as high.

The pressure was most pronounced among Nigerians earning between N150,001 and N250,000 monthly, with 71 per cent of respondents in the income bracket reporting high inflation.

The CBN said this was the highest proportion recorded across the income categories surveyed.

The finding underscores the burden facing a large section of Nigeria’s working population, particularly households whose incomes may have risen above the lowest income brackets but remain insufficient to fully absorb elevated food, transport, housing and other living costs.

Among Nigerians earning below N70,000 monthly, 66.2 per cent perceived inflation as high, while the proportion rose slightly to 66.9 per cent among those earning between N70,000 and N150,000.

For respondents earning between N350,001 and N450,000, the proportion that perceived inflation as high stood at 55.6 per cent.

The CBN survey also showed that inflationary pressure remained more pronounced among businesses and urban households.

Micro businesses recorded the highest perception of high inflation at 70.6 per cent, compared with large businesses, which recorded the lowest proportion.

Similarly, 68.8 per cent of urban households reported high inflation, compared with 64.3 per cent among rural households.

Despite the continued pressure, households expect some moderation in inflation in the months ahead.

The Inflation Expectation Index stood at 21.2 points for August, indicating that respondents expect price pressures to ease.

The CBN said expectations of lower inflation also strengthened over the medium term, with 29.7 per cent of businesses expecting inflation to moderate over the next six months, compared with 17 per cent expecting moderation over the next month.

Nigeria’s headline inflation rate stood at 15.91 per cent in June 2026, marginally lower than 15.93 per cent in May, according to the National Bureau of Statistics (NBS).

Month-on-month inflation also slowed to 1.66 per cent in June, from 1.75 per cent in May, suggesting that the pace of price increases has continued to moderate.

However, the improvement in headline inflation has yet to translate into a broad sense of relief among households and businesses, as shown by the CBN surveys.

On the business front, taxation emerged as the biggest constraint facing Nigerian enterprises.

The CBN’s July Business Expectations Survey showed that 70.8 per cent of businesses identified high and multiple taxation as their most pressing challenge, putting the issue ahead of insecurity and high interest rates.

Insecurity ranked second at 69.7 per cent, while high interest rates came third at 66.3 per cent.

Other major constraints identified by businesses included an unfavourable political climate, 62.2 per cent; high bank charges, 62.0 per cent; competition, 61.1 per cent; unclear economic laws, 58.4 per cent; financial constraints, 56.6 per cent; and poor infrastructure, 55.1 per cent.

The findings are significant coming months after the Federal Government introduced one of its most comprehensive tax reform programmes in decades, with the reforms taking effect in January 2026.

President Bola Tinubu had in June 2025 signed four major tax laws, the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill and Joint Revenue Board (Establishment) Bill, to simplify tax administration, eliminate duplication and improving revenue collection.

The Federal Government subsequently introduced additional measures, including a presumptive tax framework for Micro, Small and Medium Enterprises (MSMEs), while the Joint Revenue Board prohibited the collection of road taxes, levies and related charges through checkpoints, including road stickers imposed by state and non-state actors.

Yet, the latest CBN survey suggests that businesses continue to encounter multiple taxes and levies across different levels of government.

The persistence of the tax burden comes against a backdrop of rising government revenue.

According to the NBS, Nigeria generated N2.42 trillion in Value Added Tax (VAT) revenue in the first quarter of 2026, representing a 17.06 per cent increase from N2.07 trillion recorded in the corresponding period of 2025.

VAT revenue also increased by 9.98 per cent quarter-on-quarter, from N2.20 trillion in the fourth quarter of 2025.

Of the Q1 collection, local VAT payments contributed N1.11 trillion, foreign VAT generated N830.47 billion, while import VAT accounted for N477.55 billion.

The CBN surveys, however, suggest that the increase in government revenue is occurring alongside significant pressure on the productive sector.

For businesses, the concern extends beyond taxation to the cost of accessing credit.

The July survey showed that borrowing rate expectations remained positive at about 18–19 points, indicating that businesses expect only a marginal decline in lending costs.

The apex bank said the outlook suggested that financing conditions could ease slightly, but would remain relatively tight in the near and medium term.

Foreign exchange expectations provided one of the few brighter spots in the business survey.

Businesses expect the naira to appreciate gradually against the US dollar, with the exchange-rate expectation index rising from 4.7 points for the current month to 16.1 points for the next month, 25.8 points over three months and 30.7 points over six months.

The combination of easing inflation expectations and improving exchange-rate sentiment points to growing optimism about macroeconomic stability.

However, the persistence of high taxation, insecurity, and expensive credit and infrastructure deficiencies means that businesses are yet to experience a broad-based improvement in operating conditions.

The household findings tell a similar story.

While the headline inflation rate has fallen sharply from 25.29 per cent in June 2025 to 15.91 per cent in June 2026, the CBN’s perception survey indicates that many Nigerians continue to feel the cumulative impact of higher prices on their household budgets.

This divergence between the headline inflation rate and lived economic experience remains critical for monetary and fiscal policymakers.

For households, slower inflation means prices are rising at a slower rate; it does not mean that the prices of goods and services have returned to previous levels.

For businesses, meanwhile, tax reform will have limited impact if enterprises continue to face multiple levies, high borrowing costs, insecurity and inadequate infrastructure.

The latest CBN surveys therefore present a mixed picture of Nigeria’s economic recovery: macroeconomic indicators are improving, but households and businesses continue to bear substantial costs of the adjustment.

The challenge for policymakers, analysts say, is to ensure that improving inflation and foreign exchange stability translate into stronger purchasing power, lower operating costs, increased investment and ultimately broader economic growth.

This version gives the cover a household purchasing-power + business-cost frame, while keeping the CBN figures prominent and making the story read as one national economic story rather than two separate survey reports.