The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says Nigeria has built sufficient economic buffers to withstand inflationary pressures arising from the ongoing conflict in the Middle East.
Speaking after the conclusion of the 305th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, Cardoso said recent increases in inflation were largely driven by external shocks linked to geopolitical tensions and rising global energy prices.
He, however, maintained that the policy measures implemented by the apex bank have strengthened the economy’s resilience and would help return inflation to a downward trend in the near term.
What they are saying
Cardoso said the recent inflationary pressures were temporary and largely influenced by global developments beyond Nigeria’s control.
- “We believe that what we have now is something that has resulted from external shocks. But notwithstanding that, we have been able to create buffers that have protected us during this period,” Cardoso said.
- “We have consistently been on the path of disinflation. This, we believe, is temporary, and in due course we should go back to the trend we had embarked upon.”
- “It is key that the centrepiece of our toolkit, which is ensuring that the foreign exchange rate remains stable, remains intact.”
He also noted that the recent sovereign rating upgrade by Standard & Poor’s reflects growing confidence in Nigeria’s policy direction and reform measures.
The CBN governor stressed that the apex bank would continue pursuing policies aimed at preserving macroeconomic stability and limiting inflation pass-through effects.
The CBN highlighted recent inflation and economic indicators which suggest that underlying price pressures may be moderating despite recent headline increases.
- Nigeria’s headline inflation rate rose to 15.69% in April 2026 from 15.38% in March.
- Food inflation increased to 16.06% in April from 14.31% in March, largely driven by transportation and logistics costs.
- Core inflation eased to 15.86% from 16.21%, indicating some moderation in underlying price pressures.
- The 12-month average inflation rate declined to 19.16% in April from 20.05% in March, marking the sixth consecutive monthly decline.
Cardoso also noted that month-on-month headline inflation slowed significantly to 2.13% in April from 4.18% in March, suggesting easing momentum in consumer price increases.
More Insights
The CBN governor said Nigeria’s broader macroeconomic fundamentals remain relatively resilient despite heightened global uncertainty.
- Nigeria’s real Gross Domestic Product (GDP) expanded by 4.0% in the fourth quarter of 2025, compared to 3.98% in the previous quarter.
- The non-oil sector grew by 3.99%, supported by stronger activities in information and communication, transportation, and storage.
- The oil sector recorded 6.79% growth in the fourth quarter of 2025, aided by increased refining activities.
- Gross external reserves rose to $49.49 billion as of May 15, 2026, from $48.35 billion at the end of March, providing import cover for about 9.04 months.
According to Cardoso, the stronger reserve position continues to support exchange-rate stability and reinforce investor confidence in the Nigerian economy.
Backstory
Global economic conditions have remained volatile following the escalation of geopolitical tensions involving Iran, Israel, and the United States.
- Rising crude oil prices and supply chain disruptions have increased inflation risks across several economies.
- Analysts have warned that the Middle East conflict has exposed vulnerabilities in Nigeria’s ability to respond quickly to external shocks.
- The then Minister of Finance Wale Edun had stated that Nigeria has no immediate plans to seek financial assistance from the International Monetary Fund (IMF).
- Chairman of the Nigerian Revenue Service, Zacch Adedeji, said fuel subsidy removal helped Nigeria avoid potential subsidy costs exceeding N52 trillion at crude oil prices of $120 per barrel.
What you should know
The Monetary Policy Committee at its 305th meeting retained the Monetary Policy Rate (MPR) at 26.5%, maintaining a cautious stance amid persistent inflationary and global risks.
- The Cash Reserve Ratio was retained at 45% for commercial banks and 16% for merchant banks.
- The Standing Facilities Corridor was maintained at +50/-450 basis points around the MPR.
- The CBN said global inflationary pressures remain elevated due to geopolitical tensions, energy market disruptions, and tighter financial conditions.
Policymakers across advanced and emerging economies are increasingly adopting cautious and data-driven monetary policy approaches.
