Nigeria’s Inflation Crashes to 15.06% — But the Iran War Could Wipe Out the Gains

Nigeria’s inflation rate fell from over 33 percent in December 2024 to 15.06 percent in February 2026, one of the sharpest drops in the country’s recent economic history. The naira held steady between 1,340 and 1,430 to the dollar in the official market through Q1. External reserves topped $50 billion. GDP grew 3.87 percent in 2025. By most macroeconomic measures, the first quarter of 2026 looked like a turning point.

But underneath the encouraging numbers, trouble is brewing.

How we got here

Dr. Muda Yusuf, founder of the Centre for the Promotion of Private Enterprise, credits foreign exchange reforms and tighter monetary policy for the improvement. The CBN’s moves to stabilise the naira and clean up the parallel market contributed to price stability across several sectors. Businesses that had been pricing for currency risk started to ease off, and consumer inflation tracked lower month after month.

The numbers tell the story. From above 24 percent in early 2025, inflation fell steadily: 23.1, 21.0, 19.0, 17.33, 15.15, and finally 15.06 percent. That kind of sustained decline does not happen by accident. It took deliberate policy action, and the results showed.

The Iran problem

Then came the Iran conflict. Oil prices crossed $100 per barrel as tensions escalated. For a country like Nigeria that exports crude, higher oil prices should be good news in theory. In practice, the channel is messy. Higher global energy prices feed directly into domestic fuel costs, transport costs, and food distribution margins. The World Bank warned that inflationary pressure from the conflict could reverse the gains Nigeria has made.

Yusuf put it plainly: global crude prices above $100 because of Middle East tensions could make the cost of living worse and push inflation back up. The structural problems never went away. Energy costs are still high. Insecurity is still disrupting agricultural supply chains. Consumer demand is weak. These were masked by the headline improvement, not resolved by it.

What happens next

The federal government’s new fiscal policy measures, announced this week, cut import duties across 127 tariff lines in an attempt to keep consumer prices down. If importers pass the savings on, it could help. But the history of tariff reductions in Nigeria suggests that is a big if.

For now, the inflation number is genuinely good news. But it is fragile. If the Iran conflict drags on or escalates, the naira could come under pressure, energy costs could spike, and 15 percent could start climbing again fast. The next two quarters will show whether the reform gains are structural or just a window of calm before another storm.

Sources: NBS, CPPE, World Bank, Reuters, TheDiggerNews