Economists warn of renewed price surge as Nigeria’s inflation climbs in March

Economic experts have raised fresh concerns over Nigeria’s inflation trajectory after new data showed a renewed acceleration in price pressures despite earlier signs of moderation.

Figures released by the National Bureau of Statistics (NBS) indicate that headline inflation rose to 15.38 per cent in March 2026, up from 15.06 per cent recorded in February — a 0.32 percentage point increase.

While the year-on-year rate remains significantly lower than levels recorded in 2025, analysts say the sharp spike in month-on-month figures signals mounting short-term cost pressures.

According to the NBS report, month-on-month inflation jumped to 4.18 per cent in March, more than doubling February’s 2.01 per cent. The twelve-month average inflation rate also climbed to 20.05 per cent, compared to 18.58 per cent in March 2025.

Urban inflation stood at 14.64 per cent year-on-year, while rural inflation was notably higher at 17.22 per cent. On a monthly basis, rural inflation surged to 6.73 per cent from just 0.71 per cent in February — a development experts describe as “particularly concerning.”

Economic analysts note that although annual comparisons show improvement from last year’s elevated levels, the strong monthly momentum suggests inflationary pressures remain deeply embedded in the economy.

Experts attribute part of the renewed pressure to global developments, particularly escalating tensions in the Middle East that have pushed crude oil prices upward.

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Instability around the Strait of Hormuz — a critical global oil transit route — has heightened fears of supply disruptions. Historically, spikes in global oil prices translate into higher domestic fuel and transportation costs in emerging markets like Nigeria, further driving inflation.

Energy economists say rising logistics and production costs are feeding into broader price increases across goods and services.

A breakdown of the data reveals divergent trends between food and core inflation components.

Food inflation eased significantly on a year-on-year basis to 14.31 per cent, compared to 25.22 per cent in March 2025. However, month-on-month food inflation remained elevated at 4.17 per cent, only slightly lower than February’s 4.69 per cent.

Core inflation — which excludes volatile agricultural produce and energy — rose to 16.21 per cent year-on-year, though sharply down from 27.12 per cent recorded in March 2025. On a monthly basis, however, core inflation increased to 4.03 per cent from 0.89 per cent in February.

Financial analysts interpret this pattern as evidence that while base effects are easing annual figures, immediate price momentum remains strong.

The renewed uptick comes months after the Central Bank of Nigeria (CBN) projected that headline inflation would moderate to an average of 12.94 per cent in 2026, driven by easing food prices and lower premium motor spirit (PMS) costs.

READ ALSO: Nigeria braces for cost surge amid 2026 inflation projections

The forecast, contained in the apex bank’s 2026 Macroeconomic Outlook, had followed a marginal moderation in February when inflation dipped from 15.10 per cent in January to 15.06 per cent.

However, economists now caution that external shocks, exchange rate volatility, supply constraints and structural bottlenecks could complicate the outlook.

Particular concern surrounds rural inflation dynamics. The twelve-month average rural inflation rate rose to 19.74 per cent, compared to 16.81 per cent in March 2025, underscoring persistent cost burdens in non-urban areas.

Development economists warn that sustained rural price pressures could deepen poverty levels and widen inequality, especially as food and transportation costs weigh heavily on low-income households.

Market observers say Nigeria’s inflation path in the coming months will largely depend on global oil market stability, exchange rate management, domestic food supply conditions and fiscal policy coordination.

While annual indicators suggest gradual moderation compared to 2025 peaks, the acceleration in monthly figures points to lingering volatility — a trend experts say policymakers must carefully manage to avoid undermining economic recovery efforts.