NESG harps on economy of scale, other measures for ‘durable anti-inflation policy’ in Nigeria

*The Nigerian Economic Summit Group urges the Federal Government to focus more on reducing production costs and increasing productivity, stating the Central Bank of Nigeria’s monetary policy alone could not address the ‘structural challenges’ driving inflation despite the recent easing in price increases in the economy

Gbenga Kayode | ConsumerConnect

For far-reaching practical measures to address inflationary trends, the Nigerian Economic Summit Group (NESG) has hinted at the diligent application of economy of scale, to boost domestic productions, and lower prices of products for consumers.

The NESG said monetary policy alone could not address the structural challenges driving inflation, despite the recent easing in price increases in the Nigerian market.

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It is recalled the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) September 2026, reduced its benchmark interest rate (Monetary Policy Rate) from 26.5 percent to 23 percent.

The MPR is the benchmark interest rate that influences borrowing costs, and other interest rates in the Nigerian economy.

The Nigerian Economic Summit Group further emphasised that interest rate cuts might not be enough to lower prices of commodities in the marketplace.

ConsumerConnect reports the NESG urged the Federal Government to focus more on reducing production costs and increasing productivity in the economy.

Core benefits of economy of scale

Economy of Scale has been described as “the cost advantages that businesses enjoy when they increase their level of production or operations.”

Simply put, the more goods or services a company produces, the lower the average cost of producing each unit for consumers.

Speaking on a Channels TV programme aired Thursday, October 15, 2026, and monitored in Lagos, Faith Iyoha, Acting Head of Research and Development at NESG, opined that CBN’s monetary policy alone could not address the structural challenges driving inflation, despite the recent easing in price increases in the country.

Iyoha averred the government must introduce reforms that would make it cheaper for businesses to produce goods and services.

On reasons Nigeria must reduce cost of production

The NESG Acting Head of Research and Development explained: “Monetary policy can help to moderate the demand side of pressure.

“However, it is not sufficient. It cannot drive productivity.

“So we need to be able to drive production of goods that the everyday Nigerian purchases.”

Iyoha said: “We must move to reduce the cost of production, and it’s important to state that we need to start driving supply-side reforms that are essential to bring down inflation.

She further noted: “Monetary policy, they’ve done the best they could, and they’ve used the windows that they have. “But at this point, I think it is time for supply-side reforms to kick in.

“And the supply-side reforms are reforms that are directly articulated to drive production costs down and increase productivity.”

Impact of MPC’s Monetary Policy Rate reduction

In regard to the CBN’s Monetary Policy Committee’s recent decision to reduce the Monetary Policy Rate (MPR) from 26.5 percent to 23 percent during its meeting September 2026, Iyoha argued though lower interest rates could ease borrowing costs and support economic activity,  they would not address the high cost of producing goods across Nigeria.

According to her, sustainable progress against inflation would depend on the country’s ability to increase the supply of goods, and produce them at lower costs for consumers.

The expert declared: “Durable anti-inflation policy in the economy can only be driven when we can produce more at a cheaper cost.”

Iyoha as well cited insecurity and inadequate infrastructure as some of the extant challenges increasing production costs and discouraging investment in the economy.

The Acting Head of Research and Development also explained that insecurity affects the movement of goods, and raises business costs.

Besides, concerns about the safety of lives, property, and transport routes could deter foreign investors.

She rather advocated the formulation of policies that would attract more Foreign Direct Investment  (FDI), to support long-term productive activities in the Nigerian economy.

Nigeria needs to move beyond relying on monetary policy to control demand pressures, and pay greater attention to reforms that would improve domestic production, she stressed.

Iyoha emphasised that the ultimate goal of this effort should be to ensure that improvements in inflation figures translate into relief for households in particular and consumers at large, as Nigerians continue to contend with high prices.

The top official of NESG added that it is not just about statistics, “but statistics that are relevant to the ordinary man.”