Members of the Central Bank of Nigeria’s Monetary Policy Committee (MPC) and private sector experts have raised fresh concerns that political spending ahead of the 2027 general elections could undermine the country’s progress in reducing inflation, adding a domestic risk to mounting external pressures from rising global energy prices.
Although the committee unanimously voted to retain the Monetary Policy Rate (MPR) at 26.5 per cent during its May meeting, the personal statements of several MPC members reveal growing anxiety that election-related fiscal expansion may inject excess liquidity into the economy and reverse recent gains in price stability.
The concern comes as Nigeria records its second consecutive monthly increase in headline inflation after more than a year of steady disinflation.
While the MPC attributed the recent rise mainly to higher food and transportation costs linked to the Middle East conflict, members stressed that domestic fiscal developments could become a more persistent source of inflation as political activities gather momentum ahead of the 2027 elections.
Already, the Independent National Electoral Commission (INEC) has declared in accordance with the Electoral Act 2026, that the 2027 election campaigns for the Presidential and National Assembly elections will officially begin on August 19, 2026, and conclude on January 15, 2027, just ahead of the voting day scheduled for January 16, 2027.
Similarly, campaigns for the Governorship and State Assembly elections are set to kick off on September 9, 2026, and run until February 5, 2027, leading directly into the state-level elections on February 6, 2027.
Traditionally, these represent a period of massive spending by politicians seeking public offices in their bid to gain popularity and acceptance with the electorate.
One of the strongest warnings came from MPC member Emem Usoro, who cautioned that pre-election fiscal pressures represent an important upside risk to inflation.
She noted that fiscal expansion, rising public debt and possible election-related expenditure require monetary authorities to remain vigilant in order to preserve exchange-rate stability and maintain investor confidence.
“Fiscal pressures, particularly rising public debt and potential election-related expenditure, also represent upside risks to inflation that monetary policy must remain alert to,” she stated.
Muhammad Sani Abdullahi expressed similar concerns, arguing that election-related spending could inject additional liquidity into the banking system and weaken the effectiveness of monetary policy if not properly managed.
According to him, fiscal-driven liquidity injections remain one of the principal reasons the Central Bank should maintain a cautious and data-dependent policy stance.
He also called for stronger coordination between fiscal and monetary authorities to prevent excess government spending from undermining inflation control efforts.
Murtala Sabo Sagagi, another member, also identified election-cycle spending as one of the major domestic risks facing the economy.
While acknowledging that Nigeria’s external reserves, exchange-rate stability and banking sector resilience have improved significantly, he argued that maintaining those gains would require greater fiscal discipline as the election season approaches.
He recommended active coordination between the Central Bank and fiscal authorities, warning that increased government expenditure associated with election cycles could generate fresh demand-side inflation and weaken recent macroeconomic gains.
Aloysius Uche Ordu similarly observed that political developments are likely to exert increasing influence on investor expectations as preparations for the 2027 elections intensify.
He warned that monetary authorities must remain prepared to respond if election-related fiscal spending begins to generate additional inflationary pressures or destabilise financial markets.
The repeated references to election spending across individual MPC statements suggest that policymakers are beginning to factor political risks into their monetary policy outlook, despite the elections still being several months away.
The committee’s concerns also reflect lessons from previous election cycles, when increased government expenditure and liquidity injections contributed to higher inflationary pressures and exchange-rate volatility.
Although the official communiqué focused largely on the impact of the Middle East conflict on inflation, the personal statements indicate that committee members are equally attentive to domestic risks that could complicate the disinflation process.
The concerns being expressed within the Central Bank are also echoed by the private sector. In its 2026 Half-Year Economic Review and Second-Half Outlook, the Centre for the Promotion of Private Enterprise (CPPE) identified the approaching 2027 general elections as one of the major downside risks to Nigeria’s macroeconomic outlook.
While projecting continued economic recovery in the second half of the year, the think tank warned that “the second half of the year also presents an important downside risk arising from the increasing intensity of political and electioneering activities ahead of the 2027 elections.”
The CPPE argued that election spending could complicate the Central Bank’s inflation management efforts by increasing liquidity within the economy.
According to the report, “election-related spending could inject additional liquidity into the economy, with possible implications for inflationary pressures, foreign exchange demand and macroeconomic management.”
It added that beyond inflation, “there is also a risk that growing political activity could distract policymakers from economic governance, reform implementation and the execution of critical fiscal and structural policy initiatives.”
The organisation also stressed the importance of maintaining policy discipline as political activities gather momentum. It urged the government to ensure that “policy consistency should be preserved despite increasing political activity ahead of the 2027 elections.”
It added that “it is equally important to minimise governance distractions and ensure that electioneering does not weaken the pace of reforms, budget implementation or the quality of economic management.”
The CPPE maintained that sustaining Nigeria’s recent macroeconomic gains would depend not only on sound monetary policy but also on keeping economic reforms on course throughout the election cycle.
