Inflation To Continue Rising After March Spike – Analysts

Nigeria’s inflationary pressures are set to intensify in the coming months following a sharp uptick in March, as analysts warn that recent global shocks and lingering domestic constraints will keep prices elevated despite a modest easing in oil markets.

Latest data released by the National Bureau of Statistics (NBS) showed that headline inflation rose to 15.4 per cent year on year in March 2026, marking the first increase in 12 months. On a month-on-month basis, the surge was more pronounced, accelerating to 4.2 per cent from 2.0 per cent in February, the steepest rise since inflation tracking began in 2009.

Analysts at Afrinvest West Africa attributed the spike to a combination of global and domestic factors, noting that a resurgence in price pressures was largely inevitable.

Given recent global developments, particularly the spike in crude oil prices following the outbreak of conflict in the Middle East, alongside persistent structural vulnerabilities within the domestic economy.

They explained that the jump in crude oil prices from below $80 per barrel to above $100 per barrel in late February triggered a corresponding rise in petrol and diesel prices nationwide, with ripple effects across production and distribution chains. According to the firm, this “translated into higher PMS and diesel prices… thereby exerting upward pressure on general price levels.”

A breakdown of the inflation data showed that the increase was broad-based. Food inflation climbed to 14.3 per cent year on year from 12.1 per cent in February, its fastest pace in six months, while core inflation rose to 16.2 per cent, its first uptick since May 2025. However, on a monthly basis, food price pressures showed slight moderation, easing to 4.2 per cent from 4.7 per cent, even as core inflation surged to 4.0 per cent from 0.9 per cent, underscoring the growing impact of energy and logistics costs.

Despite oil prices retreating slightly below $100 per barrel in April, analysts remain cautious about the near-term outlook. Afrinvest projected that inflation would climb further to 16.4 per cent year on year in April, driven by the lingering effects of recent cost shocks.

“Our model estimates suggest that headline inflation could rise further, driven by lingering effects of recent cost shocks,” the investment firm stated, adding that food inflation is expected at 16.0 per cent while core inflation could reach 17.8 per cent, reflecting “continued energy price pass-through despite relative exchange rate stability.”

Analysts at Coronation Asset Management and Cordros Capital also pointed to sustained inflationary risks, highlighting exchange rate pressures, elevated logistics costs and structural supply constraints as key drivers likely to keep consumer prices elevated in the short term.

To cushion the impact on households, Afrinvest called for targeted policy responses, urging authorities to deploy measures that directly address cost pressures.

The firm recommended “the provision of affordable mass transit, expanded access to low-cost healthcare for vulnerable populations, and the release of grains from strategic reserves to stabilise food prices.”

It further warned of additional upside risks stemming from climate-related disruptions, citing projections by the Nigeria Hydrological Services Agency that flooding could affect more than 14,000 communities across 33 states and the Federal Capital Territory between July and September.