June 16, 2026/Cordros Report

Based on the recently released data from the National Bureau of Statistics (NBS), Nigeria’s headline inflation rose by 24bps to 15.93% y/y in May 2026 (April: 15.69% y/y), 29bps lower than our estimate of 16.22% y/y. We attribute the increase primarily to the uptick in food inflation (+16.96% y/y vs April: +16.06% y/y) and core inflation (+16.82% y/y vs April: +15.85% y/y). However, on a month-on-month basis, inflation slowed to 1.75% from 2.13% m/m in April, primarily reflecting softer energy price increases and easing food price pressures.

On a month-on-month basis, food inflation moderated to 2.98% in May from 3.63% in April, indicating a slower pace of food price increases. The moderation was likely supported by sustained naira stability, which helped contain imported food price pressures, alongside improved farm supply conditions partly linked to off-season harvests (harvests from crops cultivated outside the main farming season, often supported by irrigation). However, overall farm supplies remained below average, constrained by limited access to farmland, inadequate irrigation and elevated input costs. Specifically, the Famine Early Warning Systems Network (FEWS NET) noted that off-season harvests were below average, primarily due to rising insecurity, limited irrigation access and high farm input prices. Within the food basket, prices of farm produce slowed to 0.85% m/m (April: 5.99% m/m). Similarly, imported food moderated by 2.27% m/m (April: 4.38% m/m). However, on a year-on-year basis, food inflation edged higher by 90bps to 16.96% (April: 16.06% y/y) as food prices remain elevated despite easing near-term pressures.

Elsewhere, the core index increased by 1.94% m/m (April: 1.03% m/m), with the y/y rate settling higher at 16.82% (April: 15.86% y/y). This was primarily driven by higher price pressures in the alcoholic beverages & tobacco (+0.88% m/m vs April: +0.42% m/m) and clothing and footwear (+0.86% m/m vs April: +0.46% m/m) sub-components. On the contrary, price pressures moderated across education services (+0.32% m/m vs April: +4.92% m/m), information and communication (+0.63% m/m vs April: +4.07% m/m), health (+0.76% m/m vs April: +2.10% m/m), and restaurants and accommodation services (+1.40% m/m vs April: +2.62% m/m) sub-components.

Lower Energy Prices Likely to Taper Inflation in June

Developments across major inflation drivers suggest that inflationary pressures are likely to ease in June. This includes the renewed moderation in global energy prices, continued naira stability and the onset of green harvests.

On the energy front, we note the recent pullback in global crude oil prices following a US-Iran peace deal and the planned 60-day reopening of the Strait of Hormuz. Specifically, Brent crude, which settled at around USD96.00/bbl on June 2, moderated to USD91.45/bbl on June 9 and further to around USD83.10–USD83.17/bbl by June 15, compared with an average of USD102.78/bbl in May.  If sustained, the decline in oil prices is expected to translate into lower petrol and diesel prices. This would be mildly disinflationary, given the strong pass through of fuel costs to transport fares, logistics costs and food distribution.

At the same time, the naira has remained broadly stable in the official market, trading around the NGN1,360.00–NGN1,370.00/USD range in early June. This relative stability is expected to mute FX pass through to imported food, refined products, pharmaceuticals and other tradeable consumer goods. More importantly, we believe the absence of renewed currency pressure should help contain pricing expectations among importers, wholesalers and retailers, reducing the likelihood of broad based price mark-ups in June.

For food, we expect the onset of green harvests to provide some seasonal relief to prices, particularly for early maturing crops and selected staples such as maize, yam, sweet potatoes, millet, cowpea and groundnut. This is expected to improve market supply and partly offset the lingering impact of elevated transport costs and higher farm input costs. However, persistent insecurity in key food producing areas is likely to limit the extent of moderation, as disruptions to farming activities and supply routes continue to weigh on food availability and distribution costs.

Overall, we expect inflation to ease to 1.66% m/m in June (May: +1.75% m/m), with the y/y rate moderating slightly to 15.91% (May: 15.93% y/y).