Nigeria’s prolonged disinflation journey is under renewed threat, as the Financial Market Dealers Association (FMDA) projects that headline inflation accelerated to 16.42% in April 2026.
The forecast marks the first back-to-back monthly rise in annual inflation since the second half of 2025. This presents a fresh test for the Central Bank of Nigeria’s monetary policy credibility.
The forecast, contained in the FMDA Inflation Forecast report released on Wednesday, May 13, 2026, signals a strong break from the steady year-on-year deceleration that began in August 2025.
That earlier trend had brought annual inflation down from a peak of 27.35% in March 2025 to a low of 15.06% in February 2026. However, after creeping up to 15.38% in March, the projected April figure of 16.42% confirms a second consecutive acceleration—the first such sequence in nearly eleven months.
On a month-on-month basis, FMDA projects headline inflation at 2.78% in April, moderating from the 4.18% recorded in March. While the month-on-month moderation suggests the worst of the recent fuel price pass-through may have peaked, the year-on-year trajectory has now reversed decisively upward.
Renewed pressures from food and energy
The FMDA report identifies sustained pressure from food prices, higher energy costs, and elevated global commodity prices as the primary drivers of the April uptick.
Average Premium Motor Spirit (PMS) prices surged to N1,322.50 in April from N1,208.38 in March—a 9.44% increase—although this was significantly lower than the 37.35% spike recorded in March.
The domestic food price index rose to 3.69 in April from 3.60 in March, with yam recording the sharpest rise at 3.98%. Watermelon, maize, millet, and sorghum also posted moderate price increases during the month.
Globally, Brent crude oil surged sharply to $120.4 per barrel in April from $103.7 per barrel in March, a development the report links to renewed geopolitical tensions in the Middle East and the impact of the Strait of Hormuz crisis on global supply chains. The FAO Food Price Index increased by 1.6% to 130.7 points, marking its third consecutive monthly gain.
A sensitive moment for monetary policy
The April inflation forecast comes at a particularly sensitive moment for the Central Bank of Nigeria’s Monetary Policy Committee (MPC), which had spent the better part of 2025 engineering a sustained disinflation through aggressive interest rate tightening and liquidity management.
The report notes that while energy-related inflationary pressures persist, the moderation in the pace of fuel price increases—combined with a 1.36% naira appreciation to an average of N1,361.22/$ in April—may help partially contain the overall inflation outcome. However, with 72% of tracked countries globally recording higher inflation in April, up from 67% in March, external headwinds are intensifying.
“The combination of higher global energy and food prices, alongside supply disruptions linked to the Strait of Hormuz crisis, presents a challenging external environment for Nigeria’s import-dependent economy,” the FMDA noted.
What it means for consumers and policymakers
The projected uptick to 16.42% reflects the re-emergence of cost-push pressures rather than a breakdown in monetary policy credibility, according to the report, with the March fuel price shock now feeding fully into April’s price data.
The moderation in month-on-month inflation from 4.18% in March to a projected 2.78% in April suggests that the worst of the fuel price pass-through effect may have already peaked.
Nevertheless, domestic commodity prices for major food staples remain on an upward trend, with only rice easing marginally by 0.13% in April—offering limited relief to consumers facing broader food cost pressures.
With the CBN’s MPC expected to weigh these developments at its next meeting, the FMDA’s April inflation forecast adds to a growing body of evidence that Nigeria’s disinflation journey faces renewed headwinds.
The central bank now confronts a difficult choice: maintain its tightening stance to defend credibility or signal patience as cost-push shocks prove transitory.
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