Inflation in Nigeria is projected to see a sharp rebound in the coming months, potentially reaching 19% by May 2026, according to a report released today by renowned economist Bismarck Rewane. Speaking at an economic summit in Lagos on Saturday, March 21, the CEO of Financial Derivatives Company (FDC) warned that the recent 11-month period of declining price pressures is under threat from external energy shocks. Rewane noted that the ongoing conflict in the Middle East has disrupted global supply chains, leading to a 42% surge in petrol prices and a 44% increase in the cost of diesel locally. BusinessDay reports that these rising energy costs are already being passed on to consumers through higher transportation fares and food prices, complicating the Central Bank of Nigeria’s (CBN) goal of achieving a single-digit inflation rate by the end of the year.
The “global shock, local pain” phenomenon is particularly evident in Nigeria’s current economic climate. Despite being a major oil producer, the country’s reliance on imported refined products makes it highly vulnerable to international market volatility. Rewane explained that every one percent increase in the price of petrol typically leads to a 0.079 percent increase in the headline inflation rate. Gopedia Media’s economic analysis indicates that while the Naira has shown some stability recently, the “pass-through effect” of higher fuel costs is inevitable. This development has sparked concerns among small business owners and manufacturers who are already struggling with high interest rates, which currently stand at 26.5%. The projected spike to 19% would represent a significant setback for the government’s economic recovery program, which had initially predicted a fall to 12% in early 2026.
To mitigate the impact of this projected inflation, experts are calling for a more aggressive rollout of the Presidential CNG Initiative to provide a cheaper alternative for the transport sector. Additionally, there are calls for the Federal Government to revisit the “Naira-for-Crude” arrangement with local refineries to ensure that domestic pump prices are shielded from the extreme fluctuations of the global market. As the Monetary Policy Committee (MPC) prepares for its next meeting, the focus will be on whether to maintain the current tightening stance or introduce new measures to protect the purchasing power of Nigerians. For the average citizen, the message from the 2026 economic summit is clear: the road to stability remains rocky, and the external environment will continue to play a decisive role in Nigeria’s financial health for the foreseeable future.