Nigeria's inflation edges up again as fuel costs bite

Nigeria's inflation has risen for a third consecutive month, reaching nearly 16% in May, as higher food and transport costs squeeze households in Africa's most populous nation.

The annual inflation rate climbed to 15.93% from 15.69% in April, its highest since late 2025. Food inflation accelerated to 17.8%, while transport costs also rose, partly reflecting the pass-through from an earlier fuel-price shock linked to Middle East tensions.

The naira has been expected to trade within a band of roughly 1,350 to 1,500 to the dollar, suggesting exchange-rate volatility remains a concern even if it is contained for now.

The central bank has forecast that inflation will ease to around 13% over 2026, down sharply from 2025, as reforms and more stable fuel supplies feed through. But some analysts are more cautious, warning that structural pressures — exchange-rate swings, energy costs and supply constraints — could push prices higher.

The figures underline the difficult balancing act facing President Bola Tinubu's government, which has pursued painful reforms including the removal of a costly fuel subsidy and a currency float, measures intended to stabilise the economy but which have also driven up the cost of living.