The warnings were contained in the personal statements of MPC members released by the apex bank. The MPC, at its 304th meeting held on February 23 and 24, 2026, reduced the Monetary Policy Rate by 50 basis points from 27 per cent to 26.5 per cent, while retaining other key monetary parameters.

CBN Governor, Olayemi Cardoso, had earlier warned in the MPC communiqué that election-related fiscal spending could threaten the inflation outlook despite the current moderation in prices.

According to the communiqué signed by Cardoso,

“The outlook indicates that the current momentum of domestic disinflation will continue in the near term. This is premised on the lagged impact of previous monetary policy tightening, sustained stability in the foreign exchange market and improved food supply. However, increased fiscal releases including election-related spending could pose upside risk to the outlook.”

Also, in his personal statement, he noted “Growing fiscal pressures, from reduced government fiscal headroom and the approaching 2027 election cycle, warrant particular attention given the well-established link between pre-election fiscal expansion and inflation.”

Dr Muhammad Abdullahi, CBN deputy governor for Economic Policy, also highlighted election-related spending as a major risk to the inflation outlook.

He said,

“As political activities intensify ahead of the 2027 elections, increased fiscal injections and consumption spending could elevate demand-side inflation.”

Abdullahi added that “the fiscal deficit has already increased significantly, and election-related spending is likely to exacerbate this trend in 2026 and early 2027.”

According to him, stronger fiscal-monetary coordination would be needed to manage the liquidity impact of rising government spending.

Similarly, Emem Usoro, the CBN deputy governor for Operations, warned that the pre-election environment could worsen liquidity conditions and inflation expectations.

Usoro stated,

“Crucially, the pre-election environment increases the risk of liquidity surges, higher FX demand and a drift in inflation expectations.”

She added that the risks justified maintaining tight liquidity conditions despite the moderate rate cut.

According to her, “These considerations support small, cautious adjustments and the retention of strong liquidity and prudential buffers.”

Also raising concerns was the newly appointed Deputy Governor, Lamido Yuguda, who said increased fiscal releases and election spending could disrupt the disinflation trend.

Yuguda, who was a former Director General of the Securities and Exchange Commission, noted,

“The 75 per cent CRR on non-TSA public deposits remains critical, particularly given the potential for increased fiscal releases as implementation of Executive Order 9 advances.”

He further warned that, “Potential increases in fiscal spending associated with the electoral cycle could generate demand pressures and disrupt the disinflation trajectory.”

A member of the MPC, Dr Aloysius Ordu, warned that political spending tied to the elections could put pressure on foreign exchange demand and test the resilience of the economy. He said, “Domestically, rising political spending and FX demand pressures associated with the 2027 elections will test the resilience of the economy.”

Ordu added that although reforms such as Executive Order 9 were expected to improve fiscal transparency and strengthen reserves, high debt servicing costs and political-cycle spending remained major concerns for macroeconomic management.

Another MPC member, Bandele Amoo, also expressed concern over excess liquidity from fiscal injections and early political activities ahead of the elections.

He said,

“My primary concern is the persistence of excess liquidity from fiscal injections, which could undermine disinflation gains and exchange rate stability.”

Amoo further noted that “fiscal spending pressures linked to the 2026 budget cycle, and early political activities ahead of the 2027 elections may heighten risks.”

Another committee member, Professor Murtala Sagagi, said the main domestic risks to inflation included fiscal slippages and election-related spending.

He said,

“Upside risks to the inflation outlook warrant monitoring, particularly increased fiscal releases including election-related spending and any pass-through from global oil price volatility to domestic fuel prices.”

Sagagi added that “the primary domestic risks are fiscal slippage and the possibility of election-related spending which are medium-term in nature.” He urged stronger fiscal discipline and closer coordination between monetary and fiscal authorities.

The next meeting of the Monetary Policy Committee is scheduled to hold on Tuesday, May 19 and Wednesday, May 20, 2026.

This would be about four days after the National Bureau of Statistics is expected to release the country’s Consumer Price Index report for April 2026 on May 15.

Nigeria’s inflation rate rose to 15.38 per cent in March 2026, marking a reversal in the recent easing trend, as increases in food, transport, and accommodation costs pushed prices higher.

Analysts and market observers are projecting headline inflation to rise to about 15.85–15.95 percent in April 2026, up from the 15.38 percent recorded in March, according to market forecasts ahead of the latest inflation report from the National Bureau of Statistics.

The projected increase would mark the second consecutive monthly rise in inflation after Nigeria’s inflation rate reversed its earlier easing trend in March.

The March inflation report released by the National Bureau of Statistics showed that headline inflation rose to 15.38 percent from 15.06 percent in February, driven largely by rising food prices, transportation costs, and accommodation expenses.

Economic analysts say the continued inflationary pressure reflects the lingering impact of higher fuel prices, exchange rate volatility, and rising logistics costs across Nigeria’s supply chain.

According to analysts at Parthian Partners, inflationary pressure in April was influenced by the continued pass-through effect of recent petrol price increases, although month-on-month inflation may moderate slightly compared to the sharp spike seen in March.

The firm noted that petrol prices, which surged from below N900 per litre to above N1,200 in March, continued to exert pressure on transportation and food prices even as the pace of adjustment slowed in April.

Data from the March Consumer Price Index report showed that food and non-alcoholic beverages remained the biggest contributors to inflation, accounting for 5.55 percentage points of the headline figure, followed by restaurants, accommodation services, and transportation.

The report also highlighted worsening inflationary conditions in several rural communities, where food and transportation costs rose sharply.

Economists warn that the renewed inflation trend could complicate monetary policy decisions for the Central Bank of Nigeria as authorities attempt to balance inflation control with economic growth.

Analysts expect the Monetary Policy Committee of the Central Bank to maintain a cautious stance amid concerns that persistent inflationary pressures could weaken consumer purchasing power and increase business operating costs.

Despite the recent uptick, inflation remains significantly lower than the levels recorded in 2025, when headline inflation exceeded 27 percent.

However, economic experts caution that sustaining the earlier disinflation momentum may become increasingly difficult if energy prices, logistics costs, and food supply challenges continue to worsen.

The latest inflation figures from the National Bureau of Statistics are expected to provide clearer direction on the country’s price stability outlook and broader economic conditions in the coming months.

According to the latest Consumer Price Index (CPI) report released on Monday, the inflation rate fell from 16.05 per cent recorded in October 2025, marking the eighth consecutive month of decline.

The CPI, which measures changes in the cost of goods and services, rose modestly to 130.5 points in November from 128.9 points in October, reflecting a 1.6-point month-on-month increase.

Despite this, the year-on-year inflation rate declined as overall price growth moderated.

On a year-on-year basis, inflation is now 20.15 percentage points lower than the 34.60 per cent recorded in November 2024, highlighting a significant shift after a period of surging prices last year.

Analysts have noted that part of the slowdown is influenced by adjustments to the statistical base year and the weighting of items in the CPI, which now uses 2024 as the reference period instead of 2009.

Food Inflation and Urban-Rural Variations

Food inflation, typically a major driver of headline inflation, also eased sharply. Annual food price growth slowed to 11.08 per cent in November 2025, down significantly from levels seen in the previous year.

However, the report showed that on a month-on-month basis, both headline and food inflation increased, suggesting that while prices continue to rise, they are doing so at a slower pace than in prior months.

The data also revealed differences in price trends between urban and rural areas:

• Urban inflation stood at 61 per cent year on year, a sharp decline compared to 37.10 per cent in November 2024.
• Rural inflation remained slightly higher at 15 per cent year on year, but also significantly lower than a year earlier.

Context and Implications

The inflation slowdown comes as Nigeria continues to recover from elevated cost pressures and as authorities maintain macroeconomic policy measures to stabilise prices. The trend also means that Nigeria’s inflation rate now sits below the government’s 15 per cent target for 2025, a development that was highlighted by the Presidency as a positive economic indicator.

Despite the easing headline rate, the cost of living remains a concern for many Nigerians, especially as food and essential goods continue to exert upward pressures on household budgets in some regions. Economists caution that while annual inflation is moderating, policymakers must remain vigilant to sustain price stability and improve purchasing power.

The NBS report underscores a cautiously optimistic outlook, with inflation trending downward after a period of prolonged price surges that challenged consumers and businesses alike.

Continued monitoring of price dynamics, particularly around food and energy sectors, will be key to understanding how this trend evolves into 2026.