Nigeria’s year-long streak of easing inflation is facing threats from seasonal domestic demand and escalating Middle East tensions. While headline inflation moderated slightly to 15.06 percent in February 2026, a sharp reversal in food price momentum suggests the cooling period for the Nigerian economy may be coming to an abrupt end.
The volatility is most evident in the Month-on-Month (MoM) food index, which experienced a decline. After a -2.88 percent contraction in monthly food prices in January, food inflation swung back into positive territory in February, rising by 2.01 percent as a result of the Ramadan Stockpiling. This is coming weeks after the Central Bank (MPC) felt confident enough to cut rates.
“With inflation moderating persistently, the MPC reduced the MPR by 50bps to 26.50 percent, signalling growing confidence in the disinflationary trend supported by exchange-rate stability and improving food supply. However, the recent fuel price increase triggered by the U.S.–Israel/Iran conflict could limit the pace of further policy easing due to potential inflationary spillovers from higher energy prices,” analysts at AIICO Capital said in its inflation report.
This sudden uptick in the food basket was largely driven by the Ramadan effect. With the holy month commencing on February 18, 2026, Nigerian households pivoted from post-harvest caution to aggressive bulk-buying and stockpiling. According to the National Bureau of Statistics (NBS), this pushed the year-on-year food inflation rate to 12.12 percent, up from 8.89 percent in January.
On a month-on-month basis, February’s inflation reading reflects an acceleration in both food and core baskets, which increased to 4.69 percent and 0.89 percent respectively, from -6.02 percent and -1.69 percent respectively. Headline inflation declined to 15.06 percent in February 2026, from 15.10 percent in January 2026.
“Food inflation, however, may edge higher on a month-on-month basis, as Ramadan-related stockpiling and reduced farming activities drive prices for key staples, thereby exerting upward pressure on monthly headline inflation,” analysts at Meristem said.
Meristems commodities price tracker showed rising prices for staples, halting months-long declines in staples like maize and sorghum. Paddy rice and Soya beans posted stronger price increases.
They stated that PMS prices eased slightly in February after Dangote Refinery cut its ex-depot price by N25 per litre to N774 from N799 in January. While February benefited from a brief window of cheaper energy, that window appears to have slammed shut in March.
In March, analysts project that inflation could tick up as energy prices have soared since the Iran-US war, which has driven oil prices higher.
Nigerian petroleum marketers and retailers have reviewed their prices alongside Dangote Refinery’s decision to raise its prices too, directly attributable to the Iran-US-Israel conflict. With logistics costs and retailer margins stacked on top, consumers across Lagos, Abuja, and Port Harcourt are already reporting pump prices edging toward N1200 per litre.
According to Dumebi Oluwole, Lead economist at Stears, “Between February and March, the cost of living has already increased significantly, so we would expect the month-on-month inflation figure to carry more of the weight of those changes.”
“Month-on-month inflation is likely to increase, while the year-on-year figure may equally rise, but perhaps not as significantly,” she said.
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