Market News

BY MARK ITSIBOR Abuja AND OLUSHOLA BELLO, Lagos

Nigeria has been urged to move beyond reliance on monetary policy tools toward a more comprehensive strategy to combat surging inflation, which climbed to 15.38 per cent in March, according to the latest National Bureau of Statistics data.

The director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the policy response must shift from a narrow focus on monetary tools to a broader strategy that tackles the structural drivers of inflation, especially in energy, food, and transportation.

The inflation figure for March represents an increase from the 15.06 per cent recorded in February 2026, but a sharp decline from the 27.35 per cent posted in March 2025, reflecting sustained moderation in price pressures over the past year.

On a month-on-month basis, inflation accelerated significantly to 4.18 per cent in March, up from 2.01 per cent in February, indicating renewed short-term price pressures across key sectors of the economy.

A breakdown of the data showed that the largest contributors to headline inflation were food and non-alcoholic beverages, which accounted for 5.55 percentage points. Restaurants and accommodation services followed with 3.26 per cent, while transport contributed 1.80 per cent.

Conversely, the least contributors to inflation included recreation, sport and culture at 0.00 per cent, alongside alcoholic beverages, tobacco and narcotics, and insurance and financial services, both at 0.02 per cent.

Food inflation, a critical component of the consumer price index, stood at 14.31 per cent year-on-year in March 2026. This marks a notable decline from 25.22 per cent recorded in the corresponding period of 2025.

However, on a month-on-month basis, food inflation eased slightly to 4.17 per cent, down from 4.69 per cent in February. The NBS attributed the trend to price movements in staple items such as water yams, fresh ginger, cassava tubers, groundnuts, Irish potatoes, dried ogbono, fresh tomatoes, and cassava flour.

Core inflation, which excludes volatile agricultural produce and energy prices, rose to 16.21 per cent on a year-on-year basis in March 2026. On a monthly basis, core inflation surged to 4.03 per cent, a significant increase from 0.89 per cent recorded in February.

The report also introduced new sub-indices capturing price movements across key segments of the economy. On a month-on-month basis, energy recorded the highest increase at 6.6 per cent, followed by goods at 5.5 per cent and farm produce at 4.6 per cent. Services rose by 2.6 per cent, while imported food increased marginally by 1.1 per cent.

Urban inflation was recorded at 14.64 per cent year-on-year in March, with a month-on-month increase of 3.16 per cent, compared to 2.55 per cent in February.

In contrast, rural inflation remained higher at 17.22 per cent year-on-year, while the monthly rate surged sharply to 6.73 per cent from 0.71 per cent in February, underscoring persistent price pressures in rural areas.

On a month-on-month basis, Zamfara recorded the highest inflation increase at 10.77 per cent, followed by Bauchi at 9.37 per cent and Sokoto at 9.05 per cent. Lagos, Akwa Ibom, and Rivers recorded the slowest increases at 1.54 per cent, 1.80 per cent, and 1.89 per cent respectively.

On a month-on-month basis, Sokoto posted the highest food inflation at 11.78 per cent, followed by Niger at 8.59 per cent and Gombe at 8.10 per cent. Katsina, Ogun, and Adamawa recorded the slowest increases at 0.09 per cent, 0.77 per cent, and 1.30 per cent respectively.

Meanwhile, Yusuf, in his reaction to the March 2026 Consumer Price Index (CPI) report by the  NBS.

According to Yusuf, while recent months have shown a gradual moderation in year-on-year inflation, the latest data signals a worrying resurgence of inflationary pressures, particularly month-on-month.

“Headline inflation edged up to 15.38 per cent in March 2026, while month-on-month inflation accelerated sharply to 4.18 per cent, nearly double the level recorded in February. This development underscores the fragility of the disinflation process and raises concerns about renewed cost pressures in the economy.”

He noted that the recent uptick in inflation is largely reflective of renewed energy price pressures, which continue to permeate production, transportation and distribution costs across the economy, saying that energy remains a critical cost driver in Nigeria, given the persistent reliance on gas, diesel and petrol for power generation, logistics and industrial operations.

CPPE reiterated that the current inflationary pressures are predominantly cost-push in nature, driven by energy, logistics and structural inefficiencies, not excess demand.

Yusuf pointed out that “the March 2026 CPI report highlights a critical development in Nigeria’s inflation trajectory, where the earlier gains in disinflation are now being threatened by a resurgence of cost-driven pressures, particularly from energy, food and transportation.

“This emerging trend suggests that while inflation had been moderating on a year-on-year basis, underlying structural vulnerabilities remain largely unresolved, with recent month-on-month increases pointing to renewed price momentum.”

He insisted that the situation calls for urgent and targeted policy responses, as failure to address these supply-side drivers could reverse the fragile stability achieved and deepen the cost-of-living challenges facing households and businesses.

Yusuf disclosed that “while disinflation trends remain evident on a year-on-year basis, the resurgence of monthly inflation pressures signals that macroeconomic stability is still fragile.

“The policy response must therefore shift from a narrow focus on monetary tools to a broader strategy that addresses the structural drivers of inflation, particularly in energy, food and transportation.

“Without decisive action in these areas, the gains recorded in inflation moderation may prove temporary, while households and businesses continue to grapple with significant cost pressures.”