Nigeria's core inflation rate rose to 16.82 percent year-on-year in May 2026, with monthly core inflation jumping to 1.94 percent from 1.03 percent in April, according to data from the National Bureau of Statistics. The increase follows three straight months of rising headline inflation, which reached 15.93 percent in May, up from 15.69 percent in April and 15.38 percent in March. This reverses an eleven-month trend of declining inflation that had raised expectations of sustained price stability.
Food inflation remained high at 16.96 percent, driven by rising prices for onions, maize, egusi, tomatoes, wheat, yam, plantain and cowpea. However, core inflation, which excludes volatile food and energy items, is now the primary concern for policymakers as it reflects broader price pressures across housing, healthcare, education and personal services. Abayomi Fashina, Lead, Enterprise Risk Management at STL Capital Group Limited, said persistent core inflation indicates that rising business costs in production, logistics and financing are becoming embedded in consumer prices.
Sheriff Abdusalam, Corporate and Alternative Investment Analyst, noted that despite earlier optimism from declining headline figures, the recent rebound and core inflation acceleration suggest the disinflation process is fragile. The Central Bank of Nigeria's Monetary Policy Committee (MPC) held the Monetary Policy Rate (MPR) at 26.5 percent during its May 19–20 meeting, maintaining the level set after a 50-basis-point cut in February 2026. That earlier cut had sparked market hopes of a broader easing cycle, but the latest data have made the CBN cautious. A faster reduction in interest rates could weaken inflation expectations and undo previous gains.
The Central Bank of Nigeria cut interest rates in February expecting inflation to keep falling, but core inflation has since accelerated for three straight months. This weakens the rationale for further cuts while borrowing costs remain high for businesses. The CBN is now trapped between supporting economic activity and avoiding a resurgence of entrenched price pressures. Nigerians face continued high prices and expensive loans with no immediate relief in sight.
Editorial note: AI-assisted opinion, not established fact. Full disclaimer →
