The Central Bank of Nigeria and its Monetary Policy Committee have warned that rising political and election-related spending ahead of the 2027 general elections could undermine the country’s disinflation gains.
The apex bank said fresh inflationary pressures may be triggered if fiscal discipline is not maintained as political campaigns intensify across the nation.
The warnings were contained in the personal statements of MPC members released by the central bank on Thursday.
The MPC had at its 304th meeting on February 23 and 24, 2026, reduced the Monetary Policy Rate by 50 basis points from 27 per cent to 26.5 per cent.
CBN Governor Olayemi Cardoso said in the MPC communiqué that increased fiscal releases, including election-related spending, could pose an upside risk to the inflation outlook.
“Growing fiscal pressures, from reduced government fiscal headroom and the approaching 2027 election cycle, warrant particular attention given the well-established link between pre-election fiscal expansion and inflation,” Cardoso said in his personal statement.
CBN Deputy Governor for Economic Policy, Dr Muhammad Abdullahi, said election-related spending remained a major risk to the inflation outlook.
“As political activities intensify ahead of the 2027 elections, increased fiscal injections and consumption spending could elevate demand-side inflation,” Abdullahi said.
He added that the fiscal deficit had already increased significantly, and election-related spending was likely to exacerbate this trend in 2026 and early 2027.
CBN Deputy Governor for Operations, Emem Usoro, warned that the pre-election environment could worsen liquidity conditions and inflation expectations.
“Crucially, the pre-election environment increases the risk of liquidity surges, higher FX demand and a drift in inflation expectations,” Usoro said.
She said the risks justified maintaining tight liquidity conditions despite the recent rate cut.
Deputy Governor Lamido Yuguda said increased fiscal releases and election spending could disrupt the disinflation trend.
“Potential increases in fiscal spending associated with the electoral cycle could generate demand pressures and disrupt the disinflation trajectory,” Yuguda said.
MPC member Dr Aloysius Ordu warned that political spending tied to the elections could put pressure on foreign exchange demand.
“Domestically, rising political spending and FX demand pressures associated with the 2027 elections will test the resilience of the economy,” Ordu said.
Another MPC member, Bandele Amoo, expressed concern over excess liquidity from fiscal injections and early political activities ahead of the elections.
“My primary concern is the persistence of excess liquidity from fiscal injections, which could undermine disinflation gains and exchange rate stability,” Amoo said.
Professor Murtala Sagagi said the main domestic risks to inflation included fiscal slippages and election-related spending.
“The primary domestic risks are fiscal slippage and the possibility of election-related spending which are medium-term in nature,” Sagagi said.
The next meeting of the Monetary Policy Committee is scheduled for May 19 and 20, 2026.
The National Bureau of Statistics is expected to release the April 2026 Consumer Price Index report on May 15.
Nigeria’s inflation rate rose to 15.38 per cent in March 2026, the first increase since March 2025.
The Financial Market Dealers Association has projected that headline inflation rose to 16.42 per cent in April 2026.
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