March Inflation Forecast May Reach 15.4% On Energy, Food Pressures – Analysts

Nigeria’s inflation rate is projected to rise to 15.4 per cent year-on-year in March 2026, driven by escalating energy costs, rising food prices, and persistent foreign exchange pressures, analysts at Cordros Research have said.

In a recent note, the firm warned that headline inflation is set to reverse its recent moderation, increasing from 15.06 per cent recorded in February. On a month-on-month basis, inflation is also expected to climb to 4.2 per cent, up from 3.5 per cent, signalling what analysts described as the end of the recent easing in price pressures.

According to the report, the anticipated uptick is largely linked to global shocks stemming from heightened geopolitical tensions in the Middle East, particularly the ongoing strain between the United States and Iran. The crisis has disrupted global energy supply chains, triggering sharp increases in oil and gas prices and feeding into domestic inflation.

“Escalating tensions in the Middle East are delivering structural shocks to the Nigerian economy on both the demand and supply sides,” the analysts noted, adding that the impact has already filtered into higher prices for goods and services across the country.

Food prices, a major component of Nigeria’s Consumer Price Index (CPI), also recorded significant increases during the period. The report highlighted sharp price rises in staple items such as beans, tomatoes, onions, yams, cereals, tubers, and rice, driven by seasonal factors including the planting season and increased demand during the fasting period.

Analysts noted that the seasonal uptick in food prices, combined with existing supply constraints, exerted additional upward pressure on inflation, with food inflation expected to remain a key driver of overall price growth.

Energy costs also surged during the month under review, reflecting developments in the global oil and gas market. Brent crude prices rose significantly, crossing the $100 per barrel mark and peaking at $119.50,the highest level since mid-2022, while gas prices climbed sharply due to supply disruptions linked to the closure of critical energy routes.

On the domestic front, the naira recorded mild volatility, depreciating by 1.9 per cent at the official window to an average of N1,380.82 per dollar in March, compared to N1,355.50 in February.

The depreciation, driven by increased foreign exchange demand from importers, has further raised input costs for manufacturers, amplifying inflationary pressures.

Cordros also pointed to a base effect from March 2025, when inflation was relatively lower, as an additional factor expected to push the current rate higher.

“We expect headline inflation to rise to 15.40 per cent year-on-year in March 2026, reflecting the combined impact of higher food prices, increased energy costs, exchange rate pressures, and a lower base from the corresponding period of 2025,” the report stated.

The projected rise underscores growing concerns about renewed inflationary pressure in the Nigerian economy, with analysts warning that sustained global and domestic shocks could further complicate efforts to stabilise prices in the near term.