Middle East Crisis Could Push Nigeria’s Inflation to 16% – Afrinvest Analysts

Analysts at Afrinvest West Africa have cautioned that Nigeria’s recent progress in taming inflation could be undone, projecting that headline inflation may rise to around 16% in the near term. The warning comes amid escalating tensions in the Middle East, which have caused a surge in global energy prices, directly impacting domestic costs.

The National Bureau of Statistics’ latest Consumer Price Index (CPI) report shows that Nigeria’s headline inflation slightly eased to 15.06% year-on-year in February 2026, marking the twelfth consecutive month of slowing price pressures. However, the moderation was weaker than anticipated, largely because food inflation jumped 3.2 percentage points to 12.1%, offsetting gains from the decline in core inflation to 15.9%.

Month-on-month data reveal heightened volatility. Headline inflation surged 2.0% in February after a deflationary dip of 2.9% in January. Food prices rose sharply to 4.7% from negative 6.0%, while core inflation also increased modestly by 0.9%, highlighting ongoing pressure on household budgets. Analysts note that these swings are partly due to statistical adjustments made by the NBS following the CPI rebasing exercise, aimed at improving consistency in inflation tracking.

Afrinvest stressed that the Middle East crisis poses additional risks. Crude oil prices have jumped from $72.69 at the end of February to about $105 per barrel, leading to higher domestic energy costs. Petrol now sells for approximately N1,350 per litre, diesel N1,650, and cooking gas N1,400 per kilogram in several states. These increases are expected to ripple across transportation, logistics, healthcare, and food prices, intensifying cost-of-living pressures.

To counter the potential surge, Afrinvest recommends swift government intervention. Proposed measures include rolling out affordable mass transit, providing healthcare subsidies for low-income earners, and temporarily suspending tariffs on essential food imports. Without such steps, the firm warns that the Federal Government’s goal of reducing average inflation to 16.5% in 2026 could be jeopardized, leaving households to bear the brunt of rising prices.

source: Leadership