Iran War, Insecurity Drive May Inflation to 15.93%

Nigeria’s headline inflation rate rose to 15.93 per cent in May 2026, the third straight monthly increase in the annual rate, as the organised private sector pinned the worsening trend on Middle East tensions, rising energy costs, insecurity and import bottlenecks.

The Consumer Price Index report released by the National Bureau of Statistics on Monday, June 15, showed inflation climbing from 15.69 per cent in April to 15.93 per cent in May, extending a rebound that began in March after the rate dipped to 15.06 per cent in February. The figures are based on the newly rebased CPI, which adopts 2024 as the base year and 2023 as the weight reference period. The CPI rose to 140.7 points in May from 138.3 in April, a 2.4-point increase.

On a month-on-month basis, the headline rate stood at 1.75 per cent in May, down 0.39 percentage points from the 2.13 per cent recorded in April. The annual rate, however, remained far below the 26.06 per cent posted in May 2025, underscoring the sharp easing in inflationary pressures year-on-year. Average inflation for the 12 months ending May 2026 stood at 18.36 per cent, against 30.57 per cent in the corresponding period of 2025.

Food and non-alcoholic beverages remained the single largest driver, contributing 6.38 percentage points, followed by restaurants and accommodation at 2.06 and transport at 1.70 percentage points. Food inflation eased to 16.96 per cent year-on-year from 24.55 per cent a year earlier, with the NBS attributing the monthly movement to price changes in onions, maize, tomatoes, fresh pepper, cassava products, yam, plantain and cowpea.

The persistence of price pressure is rooted in external shocks that have dominated 2026. A US-Iran conflict that erupted in late February disrupted the Strait of Hormuz, a corridor for about a fifth of global oil supplies, pushing Brent crude roughly 40 to 50 per cent above pre-war levels and feeding directly into domestic fuel and freight costs.

Speaking in interviews with Journalist, Deputy President of the National Association of Small-Scale Industrialists, Segun Kuti-George, said: “Inflation has certainly been on an upward trend extensively because of the war in Iran.” He noted that while petrol fell in some areas from about N1,300 to N1,205 per litre, cooking gas remained costly at “N2,000 to N2,500” per kilogramme in many locations.

The Chief Executive of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said in a policy brief that the increase reflected “the continuing impact of recent geopolitical tensions in the Middle East on global energy markets and supply chains,” while noting that monthly pressures appeared to be moderating. He flagged insecurity as a structural driver, saying it “has displaced farming communities, reduced cultivated acreage” and disrupted supply chains.

President of the Association of Business Owners of Nigeria, Dr Femi Egbesola, cited fuel costs, insecurity now “extending to the South-West,” and inefficiencies in the National Single Window platform that left importers paying as much as “$300 a day for demurrage.”

Core inflation, which strips out volatile farm produce and energy, stood at 16.82 per cent year-on-year but accelerated monthly to 1.94 per cent from 1.03 per cent. At the state level, Yobe recorded the highest annual rate at 24.94 per cent, while Niger posted the lowest at 3.07 per cent. With global tensions and insecurity lingering, business leaders cautioned that any relief from easing US-Iran tensions may take four to six months to reach consumers.