Nigeria’s Inflation Edges Higher as Global Shocks Renew Cost Pressures

Nigeria’s inflation rate ticked up to 15.38% in March 2026, marking a reversal of the recent disinflation trend as global disruptions linked to the US–Iran conflict pushed up energy, transport, and food costs.

Data released by the National Bureau of Statistics (NBS) shows headline inflation rose from 15.06% in February, reflecting a 0.32 percentage point increase year-on-year. On a month-on-month basis, inflation accelerated more sharply, underscoring renewed pressure on household spending.

The Consumer Price Index climbed to 135.4 points in March from 130.0 in February, with food, transport, and hospitality costs emerging as the primary drivers. Food and non-alcoholic beverages contributed the largest share, followed by restaurants and accommodation, and transport.

Despite remaining below the 27.35% recorded in March 2025, underlying price pressures are building again. Monthly inflation rose to 4.18%, up significantly from 2.01% in February, highlighting the pace of price increases within a short period.

Food inflation remains a major concern. The NBS reported a year-on-year rate of 14.31% in March, rising from 12.12% in February, driven by increases in staple items such as yam, cassava, and tomatoes. On a monthly basis, food inflation stood at 4.17%.

A widening gap between urban and rural inflation trends also emerged. Urban inflation stood at 14.64% year-on-year, while rural inflation rose to 17.22%, with rural areas experiencing a sharp monthly spike of 6.73%, reflecting deeper cost pressures in less connected markets.

Core inflation, which excludes volatile food and energy prices, climbed to 16.21% year-on-year, signalling broader price increases across the economy.

Private Sector Raises Concerns

Stakeholders in Nigeria’s organised private sector have flagged the development as a worrying shift, attributing the uptick largely to rising energy costs and global supply disruptions.

According to business leaders, higher fuel prices—driven by global oil market volatility—are feeding directly into production, logistics, and distribution costs, with ripple effects across the economy.

They noted that Nigeria’s reliance on diesel, petrol, and gas continues to amplify cost pressures, pushing up transport fares, food prices, and overall cost of living.

Operators also warned that inflation remains largely cost-driven rather than demand-driven, cautioning against further monetary tightening. Instead, they called for structural interventions, including investments in mass transit systems, improved agricultural productivity, and more efficient supply chains.

Global Pressures and Domestic Impact

The inflationary trend reflects broader global dynamics, particularly disruptions in energy markets. Supply constraints and rising oil prices have filtered into Nigeria’s domestic economy, reinforcing existing vulnerabilities linked to import dependence and exchange rate pressures.

The World Bank ранее warned that rising oil prices could add over three percentage points to Nigeria’s inflation under full pass-through conditions, though the March increase remains more moderate.

At the subnational level, inflation trends remain uneven. States such as Bayelsa, Sokoto, and Bauchi recorded the highest year-on-year inflation rates, while Osun, Kano, and Kaduna posted relatively lower increases. Month-on-month data also showed significant variations, reflecting differences in consumption patterns and local economic conditions.

Policy Outlook and Government Response

The Minister of Finance, Wale Edun, cautioned against aggressive interest rate hikes, warning that excessive tightening could undermine ongoing economic reforms. He emphasised the need for balanced policy responses that address inflation without constraining growth.

Edun noted that while higher oil prices may support revenues for oil-exporting countries like Nigeria, they also increase domestic costs for fuel, food, and fertilisers—limiting the net benefit.

He called for targeted fiscal interventions to support vulnerable populations, alongside continued structural reforms such as fuel subsidy removal and foreign exchange liberalisation.

With inflationary pressures resurfacing, analysts say Nigeria faces a delicate policy balancing act—managing short-term cost shocks while sustaining long-term economic reforms and growth.