Nigeria’s inflation outlook may witness fresh pressure despite recent signs of moderation, as rising global energy costs threaten to slow the pace of price stability in the coming months.
Market analysts say while the country has experienced a gradual easing in food price pressures in recent months, external shocks—particularly in the global energy market—are beginning to challenge the fragile progress made in reducing inflation.
A new economic outlook released by Coronation Asset Management indicates that Nigeria’s headline inflation is expected to moderate slightly in February 2026 but could remain vulnerable to persistent cost pressures from the energy sector.
Nigeria inflation forecast 14.12% amid rising energy costs
According to analysts at Coronation Asset Management, the Nigeria inflation forecast 14.12% for February 2026 reflects a gradual slowdown in price growth compared with the previous month.
The firm projected that inflation could ease to 14.12 per cent year-on-year, slightly lower than the 15.10 per cent recorded in January. However, economists warn that the downward trend may not be as strong as expected due to growing volatility in global energy markets.
Experts note that Nigeria’s current inflation dynamics are shaped by a delicate balance between domestic improvements—such as exchange rate stability—and external shocks that continue to influence fuel prices and transportation costs.
The report suggests that while food inflation is beginning to cool, rising energy prices could act as a key constraint preventing inflation from falling more sharply.
Food prices offer temporary relief
One of the major factors supporting the Nigeria inflation forecast 14.12% is the relative improvement in food price conditions.
Analysts attribute this development partly to improved exchange rate stability, which has helped reduce the cost of imported food commodities.
Recent foreign exchange market developments saw the naira appreciate modestly to about N1,363.40 per United States dollar from around N1,386.55 in January. This appreciation has eased some import-related cost pressures that previously contributed to high food prices.
Stronger currency performance typically lowers the cost of importing essential commodities such as wheat, rice, dairy products and other food inputs, which can eventually moderate food inflation.
Despite this improvement, economists warn that gains in food price stability may remain fragile if broader cost pressures persist.
Energy prices threaten inflation outlook
While food prices may be stabilising, analysts say the energy sector is emerging as a major risk to the inflation outlook.
The report notes that rising global crude oil prices, triggered partly by geopolitical tensions, are already translating into higher domestic fuel costs.
Pump prices of Premium Motor Spirit have reportedly increased to about N799 per litre from around N699 earlier in the year.
Economists say this sharp rise in fuel costs has a cascading effect across the economy, influencing transportation costs, logistics expenses and the price of goods and services.
These developments could significantly affect the Nigeria inflation forecast 14.12%, as higher fuel prices often translate into broader inflationary pressures.
Transportation is a critical component of Nigeria’s supply chain, particularly for the movement of food products from rural farms to urban markets.
As logistics costs rise, producers and distributors often pass these expenses on to consumers in the form of higher retail prices.
Global developments driving energy volatility
Analysts also warn that the global energy market remains highly sensitive to geopolitical developments.
Recent tensions involving the United States and Middle Eastern powers have contributed to fluctuations in crude oil prices, increasing uncertainty in energy markets worldwide.
These developments have implications for Nigeria because domestic fuel pricing remains closely linked to international oil benchmarks.
As global oil prices rise, the cost of importing refined petroleum products also increases, placing additional pressure on domestic pump prices.
This dynamic could complicate efforts to sustain the Nigeria inflation forecast 14.12%, particularly if energy prices remain elevated for an extended period.
Global food trends also shifting
In addition to energy market volatility, global food price movements are also beginning to show signs of change.
Data from the Food and Agriculture Organization shows that the FAO Food Price Index increased slightly by about 0.9 per cent in February after several months of decline.
The increase was driven by higher prices for cereals, vegetable oils and meat products.
Although the rise is relatively modest, analysts warn that sustained increases in global food prices could eventually feed into Nigeria’s domestic inflation outlook.
Agricultural investments offer long-term hope
To strengthen food production capacity across Africa, the African Development Bank Group recently approved about $200m in financing to support agricultural development initiatives.
While such investments are expected to improve food supply over time, economists note that the benefits will likely materialise gradually.
Large-scale agricultural investments often require several planting seasons before production gains translate into noticeable price reductions in local markets.
As a result, analysts believe the immediate inflation outlook will remain largely influenced by short-term factors such as fuel costs, exchange rate stability and supply chain conditions.
Policymakers face complex challenge
The evolving inflation environment presents a complex policy challenge for economic managers.
Authorities must continue efforts to stabilise the naira and support domestic food production while also managing the impact of global energy price shocks.
Economists say maintaining macroeconomic stability will require careful coordination between monetary authorities, fiscal policymakers and energy sector regulators.
While the projected Nigeria inflation forecast 14.12% suggests that price pressures may gradually ease, the path to sustained inflation reduction remains uncertain.
For now, analysts believe the battle between cooling food prices and rising energy costs will define Nigeria’s inflation trajectory in the months ahead.
