Nigeria’s inflation rate rose for a second consecutive month in March while public debt surged to N159.28 trillion at the end of 2025, underscoring mounting macroeconomic pressure as policymakers grapple with rising prices and expanding fiscal obligations.
Data released by the National Bureau of Statistics on April 15, 2026, showed consumer prices increased to 15.38 percent in March, up from 15.06 percent in February, reversing part of the recent easing trend and pointing to renewed short-term price pressures. Separately, figures published by the Debt Management Office put total public debt at N159.28 trillion, or $110.97 billion, as of December 31, 2025, reflecting sustained borrowing by the federal and subnational governments.
The inflation report, which captures price movements for March, showed a 0.32 percentage point increase on a month-on-month basis, with monthly inflation accelerating sharply to 4.18 percent from 2.01 percent in February. The 12-month average inflation rate climbed to 20.05 percent, indicating that while headline inflation remains lower than a year earlier, underlying price momentum is strengthening.
Rural areas continued to bear the brunt of rising costs, with inflation at 17.22 percent compared to 14.64 percent in urban centres. On a monthly basis, rural inflation jumped to 6.73 percent, more than double the 3.16 percent recorded in urban areas, highlighting persistent supply constraints and cost pressures outside major cities.
Food inflation, a key driver of overall price trends, eased to 14.31 percent year-on-year from 25.22 percent in March 2025, while monthly food inflation edged down slightly to 4.17 percent. However, core inflation, which excludes food and energy, rose to 16.21 percent year-on-year, with a monthly increase of 4.03 percent, suggesting that broader price pressures remain entrenched.
The latest figures complicate projections by the Central Bank of Nigeria, which had forecast average inflation of 12.94 percent for 2026 on expectations of moderating food and fuel costs. Instead, the March data indicates that external shocks and domestic structural factors continue to exert upward pressure on prices.
Global oil market tensions, particularly around the Strait of Hormuz, have contributed to higher energy costs, feeding into transport and logistics expenses in Nigeria, where imported inflation and exchange rate dynamics remain significant drivers of price levels.
At the same time, Nigeria’s fiscal position is tightening. The Debt Management Office data, released in April 2026, showed total public debt rose from N144.67 trillion at the end of 2024 to N159.28 trillion by December 31, 2025, an increase of N14.61 trillion within a year.
Domestic borrowing accounted for the larger share of the debt stock at N84.85 trillion, or 53.27 percent, compared with external debt of N74.43 trillion, or 46.73 percent. The shift reflects a deliberate strategy to reduce exposure to foreign exchange risk while deepening the local debt market, though it raises concerns about liquidity pressures and crowding out of private sector credit.
The federal government remained the dominant borrower across both segments. External debt obligations were largely concentrated at the federal level, which accounted for $46.17 billion, while states and the Federal Capital Territory contributed a smaller portion. A similar pattern held for domestic debt, where the federal government accounted for the bulk of borrowings.
The figures were calculated using the official exchange rate of N1,435.26 to the dollar provided by the Central Bank of Nigeria at the end of 2025, reflecting the continued sensitivity of Nigeria’s debt metrics to currency movements.
Taken together, the inflation and debt data point to a tightening macroeconomic environment in which rising government borrowing and renewed price pressures are converging. Higher domestic borrowing, while shielding the country from exchange rate volatility, risks pushing up interest rates and limiting access to credit for businesses, potentially slowing economic activity.
At the same time, accelerating monthly inflation suggests that households are facing increasing cost-of-living pressures despite the moderation in annual price growth, complicating monetary policy decisions and raising questions about the pace of disinflation in the months ahead.
For policymakers, the dual challenge is becoming more pronounced. Efforts to stabilise prices may require tighter monetary conditions, while fiscal authorities continue to rely on borrowing to finance budget deficits, creating a delicate balance between growth, stability and debt sustainability.
Nigeria’s economic adjustment remains incomplete, with structural constraints, external shocks and policy trade-offs continuing to shape the outlook for Africa’s largest economy.