According to the April CPI data released by the National Bureau of Statistics, Nigeria’s headline inflation rate edged higher to 15.69% year-on-year in April 2026, compared with 15.38% recorded in March. This highlights the persistence of underlying price pressures across the economy. More notably, the month-on-month CPI decelerated to 2.13% in April from over 4% in the previous month, suggesting some relief from the price surge recorded in March.
The latest inflation data highlights the persistence of broad-based price pressures, driven primarily by elevated food prices, household equipment, information & communication, higher healthcare expenses, education services and lingering high cost of doing business.
VNL’s inflation diffusion index further corroborated the general rise in price level. The inflation index stayed higher at 77% in April, although slightly lower than the previous month.
The major pressure point was food prices. For instance, structural inefficiencies within the agricultural value chain continue to worsen supply challenges. In fact, the Nigerian Economic Summit Group (NESG) estimates annual post-harvest losses to about ₦3.5 trillion and ₦5 trillion, equivalent to 7.8% of Nigeria’s 2025 crop production GDP value. These losses continue to constrain food supply and amplify price pressures across major agricultural commodities.
Although food inflation remained elevated, the pace of increase moderated slightly. Yearon-year food inflation stood at 16.06% in April 2026 but eased to 3.63% from 4.17% in March on a month-on-month basis. Meanwhile, core inflation declined significantly to 15.86% year-on-year from 16.21%, signaling a gradual disinflationary trend. Overall price pressures remain elevated as food and non-Alcoholic Beverages account for 40% of the CPI basket.
Even though, over 2% m/m inflation is still a threat to price stability, the monetary policy authority maintains that the pressure is largely transitory, owing to the relative stability at the foreign exchange (FX) market and the proactive approach by the CBN to manage system
liquidity through record high OMO issuances.
Our Expectations & Market Impact
For May 2026, we project headline inflation will edge higher to 15.97% y/y, reflecting a 1.78% m/m increase. We believe prices of energy and core components have limited room for further upside as they remain near record highs. Sustained stability in the FX market would also provide support for a moderation in prices.
However, if headline inflation continues to rise above 1.5% m/m for the rest of the year, the index could spike above 16% in September owing to the low base effect. Fixed income investors are watching this closely in order to reprice rates appropriately. For instance, bond yields have risen by more than 40bps since April 1 till date, in contrast to the relative yield stability in the NTBills market.
For the stock market, valuations may seem stretched in some bellwether counters, but there are still pockets of opportunities for tactical investors with preference for good fundamentals.
