Macroeconomic Report & Economic Updates

According to the National Bureau of Statistics (NBS), Nigerian commuters faced heightened transport costs across all major modes in May 2026. Specifically, the average fare for an intra[1]city bus journey increased by 2.43% month-on-month to ₦1,431.25, representing a significant 38.63% year-on-year surge. Similarly, intercity bus fares per drop climbed to ₦9,699.55, reflecting a 0.96% month-on-month increase, and a 21.89% year-on-year increase. Furthermore, motorcycle (Okada) transport witnessed the steepest annual jump, with average fares soaring by 52.45% year-on-year to reach ₦1,072.51. Likewise, air travel and waterway passenger transport were not spared, recording year-on-year fare increases of 20.86% and 30.88%, respectively. The current surge in transport costs across all modes of transportation can largely be attributed to the increase in crude oil prices on the international market, driven by the ongoing conflict in the Middle East. This has, in turn, led to higher petroleum product prices. Consequently, financial pressures on households have likewise surged, as commuting expenses consume an increasingly larger share of disposable income. Moreover, these rising logistical costs inevitably cascade into the broader economy, increasing the prices of goods and services and fueling overall inflationary momentum. Therefore, the government must urgently prioritise targeted interventions to alleviate these pressures, such as deploying subsidised mass transit schemes across heavily populated urban centres. Ultimately, accelerating investments in alternative transportation infrastructure, particularly rail and inland waterways, will sustainably reduce the overreliance on expensive road transport.

According to the Central Bank of Nigeria (CBN), on 18 June 2026, national gross reserves reached US$51.04 billion, surpassing the US$51 billion mark and hitting a 17 year high. The last time the reserves reached US$51 billion was on 20 January 2009, when it stood at US$51.07 billion. The upward ascent throughout June 2026 was remarkably consistent. Beginning the month at US$49.80 billion on June 1, the reserves climbed continuously day after day. On June 18, 2026, gross reserves officially reached the critical milestone, reaching $51.04 billion. By June 30, reserves peaked at an impressive US$51.45 billion. As expected, the exchange rate remained relatively stable in June 2026, trading between ₦1,356 and ₦1,384 per US$ at the Nigerian Foreign Exchange Market (NFEM), with reserves providing a temporary buffer for the naira. This monumental breakthrough bolsters national creditworthiness, enhances international investor confidence, and enhances support against external economic shocks. Rising oil prices tied to the US Israel–Iran conflict contributed to the uptick in the nation’s reserves. To sustain reserve growth beyond the conflict, the government should diversify external inflows, including through expanding non-oil export capacity, addressing insecurity to boost investors’ confidence, and ensuring reserves are supported by sustainable, long-term drivers rather than temporary shocks.

According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate increased to 15.93% year-on-year in May 2026, up from 15.69% the previous month. The Consumer Price  Index (CPI) rose from 138.3% in April 2026 to 140.7% in May 2026. Food inflation stood at 16.96% year-on-year, while core inflation, which excludes volatile agricultural produce and energy, reached 16.82%. On a month-on-month basis, however, headline inflation moderated to 1.75% from 2.13% in April, indicating a slower pace of average price increases. Similarly, month-on-month food inflation decreased to 2.98% from 3.63%. Core inflation rose monthly to 1.94% from 1.03%. The persistent rise in year-on-year inflation indicates that price pressures remain elevated, largely driven by food prices. Nevertheless, the deceleration in month-on-month headline and food inflation suggests some easing of immediate price momentum. The sharp increase in monthly core inflation reveals that underlying structural costs and non-food price dynamics remain significant hurdles, which could continue to erode households' purchasing  power and raise production costs for firms. Therefore, the government must tackle structural bottlenecks driving core inflation, particularly energy and transport costs. Simultaneously, targeted interventions in agricultural value chains are essential to sustain the downward trend in monthly food inflation. At the same time, the Central Bank should maintain its focus on stabilising the currency to mitigate imported inflation.Nigeria Economic Update, Issue 22

According to the Organisation of the Petroleum Exporting Countries’ (OPEC) Monthly Oil Market report for June 2026, Nigeria’s crude oil production increased by 2.7% from 1.489  million barrels per day (bpd) in April 2026 to 1.530 million bpd in  May 2026. The increase reflects a gradual strengthening of the oil sector performance amid ongoing efforts to improve production levels. Despite this development, production remained 25.7 percent below Nigeria’s national target of 2.06 million bpd, indicating the persistent gap between current output levels and medium-term production goals for the sector. The report also indicated that Nigeria’s economic conditions continued to improve, supported by stronger oil sector performance, recovering consumer demand, and increased business activity. While higher oil output is expected to support export earnings and government revenue, sustained performance around OPEC quota levels would further reinforce investor confidence and strengthen Nigeria’s position in the global oil market. To consolidate recent gains, attention should first be directed at improving production efficiency and reducing disruptions across key oil-producing assets. Beyond this, strengthening upstream investment conditions will be necessary to support capacity expansion and close the gap with production targets. In addition, maintaining policy consistency in the energy sector will be important for sustaining investor confidence and ensuring that recent improvements translate into durable output growth and macroeconomic stability.

Data from Stanbic IBTC’s June 2026 Purchasing Managers’ Index (PMI®) report indicate that Nigeria’s private sector recorded a notable improvement in May 2026, with the headline index rising to 54.1 from 52.4 in April 2026. This represents the strongest monthly expansion since August 2025 and marks the fourth consecutive month in which private-sector activity has remained above the 50-point threshold, signaling sustained growth. The improvement was driven primarily by stronger demand and an increase in new orders, with the relevant index rising to 57.0 points from 54.6 points in the previous month. Firms attributed the increase in demand to the introduction of new products and responded by expanding inventories at a robust pace. On the price front, higher fuel costs, partly associated with the outbreak of conflict in the Middle East, continued to exert upward pressure on input costs and output prices. Nevertheless, inflationary pressures eased for the second consecutive month, with input-cost inflation falling to a three-month low and output-price inflation moderating to its weakest level since February. The sustained expansion in the PMI points to strengthening private-sector momentum and resilient demand as the economy enters the second half of the year. However, persistent cost pressures arising from fuel prices, coupled with subdued job creation due to power shortages and inadequate infrastructure, highlight structural constraints that could hinder economic recovery and long-term growth. To sustain the current momentum, policymakers should prioritise measures to address energy and electricity supply challenges while also investing in critical infrastructure to support private-sector expansion.