Macroeconomic Report & Economic Updates

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.

According to the National Bureau of Statistics (NBS) April 2026 premium motor spirit (petrol) price watch report, the average retail price of premium motor spirit (petrol) in April 2026 was ₦1,532.93, up 23.69 percent from ₦1,239.33 in April 2025. Month-on-month, the April average rose 18.97 percent from ₦1,288.54 in March 2026. By state, Yobe recorded the highest average retail price at ₦1,599.05, followed closely by Edo (₦1,595.74) and Bauchi (₦1,589.07). The lowest averages were in Niger (₦1,403.89), Sokoto (₦1,404.16), and Katsina (₦1,406.28). Regionally, the South-South zone had the highest average retail price at ₦1,566.76, while the North-West zone recorded the lowest at ₦1,508.81. While rising prices are expected in the wake of the U.S.-Israel-Iran conflict, the sharp increase underscores Nigeria’s continued vulnerability to external oil market shocks despite its status as a major oil-producing nation. Besides, the current increase in PMS prices could erode the gains from the recent moderation in inflationary pressures. It could also further weaken household purchasing power by increasing the prices of goods and services, including transport fares. Thus, strengthening economic resilience will require ensuring that domestic refineries operate at optimal capacity, establishing and maintaining a strategic petroleum reserve, and attracting greater investment into the oil sector through infrastructure improvements and sustained efforts to curb crude oil theft and pipeline vandalism. In addition, targeted social protection measures should be expanded to support vulnerable households and cushion the adverse welfare effects of the price shock.

The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC), at its 305th meeting held on 19–20 May 2026, retained the Monetary Policy Rate (MPR) at 26.5 percent. The Committee also maintained the asymmetric corridor around the MPR at +50/-450 basis points, while retaining the Cash Reserve Ratio (CRR) at 45.0 percent for Deposit Money Banks, 16.0 percent for Merchant Banks, and 75.0 percent for non-Treasury Single Account (non-TSA) public sector deposits.  The decision to maintain policy rates reflects the CBN’s cautious approach to balancing inflation control with broader macroeconomic stability objectives. By sustaining a tight monetary policy stance, the MPC aims to reinforce ongoing efforts to moderate inflationary pressures, stabilise the exchange rate, and manage liquidity conditions within the financial system. The decision also underscores persistent concerns regarding elevated inflation, despite the recent moderation in month-on-month price increases. However, high borrowing costs may continue to constrain private sector credit growth, investment, and business expansion, particularly among small and medium-sized enterprises.  To achieve more sustainable inflation control, monetary tightening should be complemented by fiscal and structural measures to address supply-side drivers of inflation, particularly food insecurity, logistics bottlenecks, and rising energy costs. The government should also prioritise policies that enhance productivity and support domestic production to sustainably ease inflationary pressures while minimising the adverse effects of high interest rates on economic growth, employment, and private-sector development.

The National Bureau of Statistics’ (NBS) LPG Price Watch shows that cooking gas prices increased in March 2026 for all cylinder sizes. The average retail price for refilling a 5kg cylinder rose by 12.60 percent month-on-month from ₦6,799.18 in February 2026 to ₦7,655.73 in March 2026, while also recording a 4.55 percent increase year-on-year. Similarly, the average retail price for refilling a 12.5kg cylinder increased by 15.62 percent month-on-month from ₦16,997.94 in February 2026 to ₦19,652.83 in March 2026, and by 6.48 percent year on-year. State-level analysis shows significant variation in prices. For the 5kg cylinder, Kaduna recorded the highest average retail price at ₦9,212.21, followed by Lagos and Taraba, while Bauchi recorded the lowest at ₦6,295.40. For the 12.5kg cylinder, Nasarawa recorded the highest average retail price at ₦23,418.12, followed by Kaduna and Akwa Ibom, while Bauchi again recorded the lowest at ₦15,738.50. Based on zonal analysis, the North-West recorded the highest average retail prices for both a 5kg and a 12.5kg cylinder sizes, while the South-South recorded the lowest for refilling a 5kg cylinder and the South-East recorded the lowest for refilling a 12.5kg cylinder. Given the increase in the price of cooking gas, this could further worsen the cost-of-living pressure on households given current economic conditions. Specifically, it could raise household living expenses, deepen energy poverty among vulnerable households, and encourage the use of harmful fuels such as charcoal and firewood, with negative consequences for public health, environmental sustainability, and overall household welfare. To address these challenges, the government should improve domestic gas supply, support local LPG production, invest in distribution infrastructure across the country, and provide social protection measures, particularly for vulnerable households

The National Bureau of Statistics’ Transport Fare Watch for March 2026 revealed that transport costs in Nigeria increased significantly across major categories, reflecting persistent inflationary and energy-related pressures. Intra-city bus fares rose by 14.86 percent month on month to ₦1,373.49, while intercity transport fares increased by 17.95 percent to ₦9,564.12. Airfares also increased by 2.33 percent to ₦157,224.05, while motorcycle (Okada) and water transport fares rose by 9.05 percent and 4.59 percent respectively. On a year-on year basis, transport costs recorded substantial increases, particularly for Okada fares, which rose by 57.37 percent, and intra-city bus transport, which increased by 41.33 percent. Regional analysis indicated that the South-West recorded the highest fares for intra-city bus and motorcycle transport, while the South-South recorded the highest water transport fares. The sustained rise in transport fares was driven largely by elevated fuel and energy costs, exchange-rate pressures affecting vehicle maintenance and aviation operations, and broader inflationary conditions in the economy. Rising transportation costs continue to increase household expenditure, weaken purchasing power, and intensify cost-of-living pressures, particularly for low-income households. In addition, higher intercity transport fares may further worsen food inflation by increasing logistics and distribution costs across supply chains. To moderate transport-driven inflation, the government should strengthen investment in affordable public transportation, rehabilitate critical road infrastructure, and accelerate the adoption of alternative-energy transport systems, such as compressed natural gas (CNG)-powered buses. Sustained exchange rate stability and measures aimed at easing fuel price pressures will also be essential for reducing transportation costs and supporting broader price stability.