Nigeria’s Inflation to Rise on High Food Prices, Naira Depreciation
Nigeria’s headline inflation rate is projected to rise in May due to higher food prices and naira depreciation, reflecting geopolitical disruptions that have pushed global oil prices higher.
The consumer price index (CPI) is projected to increase in May, with a slew of analysts making projections ahead of Nigeria’s inflation report scheduled to be released on Monday.
The inflation rate has accelerated for two consecutive months due to the negative effects of Middle East tensions, which forced Iran to close the Strait of Hormuz, restricting oil-laden vessels from passing through the channel since February, 2026.
While Nigeria is among African oil-producing nations benefiting from rising oil prices, the removal of the petrol subsidy leaves locals facing high pump prices.
The rise in petrol prices per litre affects the cost of living, driving up food and transportation prices, with a 63% poverty rate, according to the International Monetary Fund (IMF).
The National Bureau of Statistics (NBS) reported that headline inflation continued its upward trend for the second consecutive month in April 2026, edging up by 31 bps to 15.69% YoY from 15.38% year on year in March.
This upward trajectory was driven by renewed pressure in food inflation. Food inflation climbed to 16.06% YoY in April 2026 from 14.31% YoY in March, driven by higher transportation costs and supply chain disruptions for staples such as rice, beans, yam, and garri.
On the other hand, core inflation eased to 15.86% YoY from 16.21% YoY in the previous month, reversing the uptick recorded in March. This reversal was primarily driven by declines in subcategories such as education services, clothing & footwear, and health.
In a note, analysts at Meristem Securities Limited said food price movements in May 2026 were broadly mixed, with an overall tilt towards price increases across most staples.
“Data from our commodity price tracker showed that key items such as maize, sorghum, paddy rice, and soya beans all recorded price upticks, reflecting pre-harvest supply tightening and sustained pressure in the food market”, Meristem said.
In contrast, sesame was the only major staple to record a decline, easing by -1.88% month on month, indicating some softening in supply conditions within that segment.
Domestic fuel prices remained elevated in May, as multiple petrol price increases, since the start of the ongoing geopolitical tensions, continued to exert pressure on transportation and distribution costs.
The cumulative impact of these adjustments kept logistics costs high, contributing to broader inflationary pressures.
According to Meristem Securities Limited, the Naira depreciated against the US dollar by 0.55% in May, averaging N1370 per dollar at the official window compared with NGN1,362.47 in April, increasing the cost of imported goods and production inputs.
The investment firm said this exchange rate weakness likely amplified imported inflationary pressures, further contributing to higher consumer prices across both food and core components.
“Looking ahead, we expect headline inflation to edge higher on a year-on-year basis in May 2026, driven by both food and core inflation pressures”.
The firm predicts that core inflation will trend higher, driven by elevated fuel prices, rising transportation costs, and persistent pass-through effects.
Analysts said food inflation is likely to remain elevated due to supply constraints and higher distribution costs across key producing regions.
However, on a month-on-month basis, Meristem Securities said inflationary pressures may moderate slightly, reflecting a potential easing in food price momentum, a partial normalisation of distribution costs due to reduced oil price momentum, and a slower pass-through of earlier cost increases into retail prices, although overall price levels are expected to remain sticky. Nigeria’s Inflation Drops to 15.06% in February
