Nigeria Inflation Holds at 15.91%: Will CBN Cut Rates?

Nigeria’s June inflation was largely unchanged at 15.91%, but food prices and energy-cost risks remain key concerns. As the Central Bank of Nigeria prepares for its July MPC meeting, investors and analysts are not expecting rate cuts. Instead, they are watching for signals on how the apex bank is interpreting the data and recent geopolitical developments. Nigeria’s reforms are beginning to deliver results as the country continues to prioritise and incentivise foreign investment inflows.

In the US, major banks continue to deliver strong Q2 earnings, appearing largely unaffected by the US-Iran crisis as America launches fresh strikes on Iran. 

China’s economy slows - growing by 4.3% in Q2. Plus other business headlines.

Transcript

We just got Nigeria June inflation data … a key data print ahead of showing Nigeria’s award-winning Central Bank’s 306th Monetary Policy Committee meeting to hold on July 20 and 21, where it will consider whether to restart monetary easing while awaiting clearer inflation signals.

Nigeria’s annual inflation rate surprisingly held steady in June, as new price pressures emerge from resumed hostilities in the Middle East.  Analysts had expected a slight increase …instead CPI decreased albeit very slightly to 15.91 percent in June from 15.93 percent in May of 2026. On a month-on-month basis, the June Headline inflation rate was 1.66%, which was 0.09% lower than the 1.75% rate recorded in May 2026.  

Indeed, the Central Bank of Nigeria won the 2026 Central Bank of the Year Award in London for reforms supporting monetary stability, foreign exchange management and confidence in the financial system. Yet Governor Olayemi Cardoso knows lingering high inflation remains a major obstacle to price stability.  On the fiscal front, Finance Minister Taiwo Oyedele has inaugurated a Ministerial Advisory Committee to strengthen economic policymaking and advance fiscal reforms, with inclusive growth and inflation control among its top priorities.

At the same time, the government continues to encourage foreign investment to drive growth, as global exchanges show renewed interest in reassessing Nigeria’s risk profile in response to meaningful economic reforms that have made the economy more attractive. Last week, NGX Chairman Umaru Kwairanga led a delegation to London for talks with FTSE Russell, investors, custodians and other market stakeholders on settlement concerns. The meeting followed FTSE Russell’s pause on Nigeria’s Frontier Market reclassification, despite recent market-access reforms. A final decision is due in August.

Still on investment incentives, the government has offered Shell a larger tax break to accelerate about $20 billion in spending on the Bonga Southwest Aparo deepwater oil project. The incentive, an $11.50-per-barrel rebate, is more than double the standard tax credit and could be extended to other international oil companies as Nigeria seeks to attract energy investment even as many companies are diversifying their sourcing away from the Middle East (that is oil companies) and that creates opportunities for basins like in Nigeria.

In the Middle East, the collapse of the US-Iran ceasefire roiled oil markets, sending Brent crude back above $85 a barrel. Trump warned that key Iranian infrastructure could face heavy strikes in the coming days without a diplomatic breakthrough. He also dropped an earlier threat to impose a 20% levy on cargo moving through the Strait of Hormuz, saying additional Gulf investments in the US would help offset the rising cost of the conflict.

Nigeria’s high inflation remains a barrier to investment, driven by weak infrastructure, security challenges and food supply disruptions. Reliable electricity is still a major priority, with no clear medium-term turnaround in sight. Meanwhile, Bangladesh is betting on a $13 billion Russian-built nuclear plant that could meet 15% of its electricity demand. The Rooppur plant’s two Russian-designed reactors, due in 2028, highlight nuclear power as a potential option for industrializing economies facing large infrastructure gaps.

Hello and welcome to Global Business Insights, where we offer perspectives to help you navigate today’s increasingly complex business landscape.

Back to our main story on the latest June Print …where we saw inflation steady at15.91% but month on month inflation down to 1.66%.

For Nigerans high inflation cannot be a minor matter …for illustration – using average inflation levels, N10,000 Cash ten years ago is worth about N1,840 in 2025 purchasing power … It means about 81.6% of purchasing power has been lost over 10 years. Cash held in naira from 2015 would buy less than 1/5 of what it bought then. The more savvy business player and corporations like banks will hedge with USD, real estate, stocks, or businesses – to ride the waves – even sometimes profitably. The over 100 million poorer Nigerians will simply find their wallets reduced to almost nothing – making savings almost impossible as their living costs escalate with no buffers available to them for protection against the high inflation. This is why high inflation is known to hurt the more vulnerable and poorer segments of society. 

Food inflation in Nigeria remains alarmingly high, even by African standards. While rising food costs are a major driver of living costs across the continent, the pace varies sharply by country. Among 44 African countries with the latest data, Nigeria recorded the third-highest food inflation rate in May 2026 at 16.96%, behind only Libya and Malawi at 17.6%. The continental average was 4.88%, making Nigeria’s rate nearly 3.5 times higher. 

Insecurity and conflict are driving food inflation by forcing people off farms and disrupting supply chains. Analysts say transport costs and avoidable harvest losses are also adding pressure. More importantly, Nigeria’s food inflation has risen every month since January 2026, climbing from 8.89% to 16.96% in May and up again to 17.52% on a year-on-year basis in June. On a month-on-month basis, the Food inflation rate in June 2026 was 3.75%, up by 0.77% points from 2.98% in May 2026. 

In conflict-affected parts of the North, many households struggle to reach food supplies compounded by an array of costs and bottlenecks in distribution to other parts of the country – inevitably resulting in high prices.

Earlier in the week, Standard Chartered analysts said they expected the Central Bank of Nigeria's easing cycle to be slower and more cautious due to higher than anticipated inflation. They now expect inflation averaging 15.5% in 2026 and scope for 150 basis points of policy easing, taking the monetary policy rate to 25% at year-end. The data also comes as a fragile ceasefire between the US and Iran effectively collapsed over the course of several days causing energy prices to spike again as a blockade of the Strait of Hormuz was reinstated. Higher energy prices that will filter through into transport and still rising food costs amid supply chain challenges plus increased dollar could imply the central bank would leave its key interest rate at 26.5% next week.

The central Bank had said in an earlier meeting that the May inflation uptick was likely to prove temporary. It remains unclear how the recent data and a resumption of hostilities in US-Iran front will impact this conclusion as the focus shifts to next week’s MPC governor briefing.

In other global news, China’s economy grew at its slowest quarterly pace since late 2022, as Beijing appears to prioritize competitiveness and technological self-reliance over faster growth. The slowdown may strengthen calls for policy stimulus, with falling investment and weak consumer demand adding further pressure.

Still on China, Apple has received regulatory approval to launch its AI services on iPhones in the country, the world’s largest smartphone market – that’s China. “Apple Intelligence” will reportedly draw on AI models from Chinese tech giants Baidu and Alibaba. After a slow start in the AI race, Apple has stepped up its efforts by paying other technology firms substantial sums to use their models.

U.S. inflation delivered a surprise, with the consumer price index falling 0.4% in June from the previous month and annual inflation easing to 3.5%, helped by lower gas prices.  Less surprising was the continued strong performance of U.S. banks in the second quarter, supported by a solid economic backdrop with low unemployment, heightened market volatility, active stock trading, IPO activity, and dealmaking despite ongoing tensions in the Middle East.

Morgan Stanley's just reported that its net revenue went up 27% year-on-year to $21.3 billion in the second quarter, with equities trading surging 69%.  Yesterday after the four largest U.S. banks and Goldman Sachs reported second-quarter earnings results - Shares of JPMorgan Chase rose 2.5%, Goldman surged 9%, and Bank of America rose 1.8%—all to new record highs. Goldman was the best-performing stock in the Dow Jones Industrial Average on Tuesday. 

JPMorgan Chase’s profit in the second quarter rose 41% from a year ago to $21.2 billion  Goldman said profits for the three months ended in June came in at $20.98 a share, up 92% from the same period last year and close to double forecast of $14.38 a share.

Wells Fargo reported Q2 earnings higher than forecasts, with earnings per share coming in at $2. Second-quarter revenue was $22.6 billion. The same with Citigroup outperforming expectations – still Citigroup and Wells Fargo fell 5.3% and 2.8%, respectively …. as much higher performance expectations were met with calls for patience – Citigroup sees more headcount reductions as it seeks to shave more costs.

BlackRock stock were higher today after the company reported Q2 earnings and assets that beat expectations. BlackRock reported second-quarter adjusted net income of $2.29 billion, up 22% from the prior year. 

IBM shares plunged 25% yesterday, marking their worst trading session on record after the company released weak preliminary second-quarter results. For technology stocks, the shift away from software was evident as IBM CEO Arvind Krishna warned that customers were shifting their spending to artificial-intelligence hardware like servers, data storage and memory chips. Many other software related stocks, including Accenture, Adobe, ServiceNow and Workday, were posting muted gains at best. 

South Africa’s financial regulator is probing governance at the $219 billion Public Investment Corp. after senior leadership changes raised concerns over treasury tensions. The state-owned fund manager suspended CEO Patrick Dlamini and replaced its acting investment chief amid a whistleblower-driven probe, leaving the PIC without a chief executive and deepening its leadership crisis.

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