KEY POINTS
- S&P raised Nigeria’s 2026 inflation forecast to 16.9 per cent from 15.0 per cent.
- Higher transport and fertiliser costs could push food inflation up in coming months.
- S&P cut Nigeria’s growth forecasts to 3.7 per cent for 2026 and 3.5 per cent next.
S&P Global has raised its 2026 inflation forecast for Nigeria, warning that rising energy and transport costs will keep prices high.
The credit ratings firm now expects average inflation of 16.9 per cent this year. That is up sharply from its earlier projection of 15.0 per cent.
S&P pinned the revision on oil prices. It said the jump in global crude was feeding into domestic energy costs faster than it had expected.
The warning came in the agency’s latest report on emerging markets, titled Economic Outlook Emerging Markets Q3 2026: Inflationary Pressures Will Persist. It said energy inflation had picked up across Europe, the Middle East and Africa.
Nigeria and Türkiye stood out as the worst hit. “Energy inflation has picked up broadly across the region, particularly in Nigeria and Türkiye,” the report said.
Among the major economies it covers in that region, S&P said Nigeria saw the largest upward revision to its inflation forecast.
Food prices are next in line
S&P also flagged a fresh threat to household budgets. It said food inflation could climb in the months ahead.
The agency tied that risk to two pressures. Higher transport costs and more expensive fertiliser are both pushing food prices up.
“We expect food inflation to increase over the coming months due to higher transportation and fertilizer costs,” the report said.
Recent figures show the strain is already building. Nigeria’s headline inflation rose to 15.93 per cent in May, up from 15.69 per cent in April.
Global benchmarks back the trend. Indices tracked by the World Bank and the FAO point to stronger energy and food price pressures worldwide.
Growth takes the hit
Higher prices come at a cost to the wider economy. S&P said the revised outlook had lowered its expectations for Nigerian growth.
The reason is household spending, a central engine of the economy. Pricier goods leave families with less to spend, and that drags on output. The agency cut its growth forecasts by 30 basis points for both 2026 and 2027. It now sees the economy expanding 3.7 per cent this year and 3.5 per cent next year.
The update lands amid renewed pressure on global commodity prices. S&P linked that to tension in the Middle East and disruption to energy supply chains.
The agency offered little near-term relief. It said price pressures in Nigeria could stay elevated even with steadier exchange rates and higher oil output.That leaves policymakers in a tight spot. The same oil revenue that supports the budget is now helping to drive the inflation squeezing ordinary Nigerians.
