Ibrahim Abdulkadir, northeast coordinator of the National Emergency Management Agency (NEMA), said “between 25 and 28” were killed in Sunday night’s attack while locals said at least 21 died.
News of the blast was slow to emerge because of poor communications with the remote town, which is some 140 kilometres (87 miles) by road from the Borno state capital, Maiduguri.
Maiduguri was also hit on Sunday night, when a series of blasts rocked a mosque, killing worshippers, and football fans watching a televised game nearby.
A total of 117 people died.
Boko Haram militants captured Monguno after what is thought to be the group’s deadliest strike in the six-year insurgency in the nearby town of Baga, on Lake Chad, in January when hundreds died.
The army has since regained control of the town, which is home to Nigeria’s national security advisor Babagana Monguno.
Abdulkadir said Sunday’s blast was caused by a suicide bomber but local trader Alamin Ahamad said: “We strongly suspect the bomb was concealed like merchandise in a sack and dropped at the market.
“It later exploded and killed many people. Personally I participated in the evacuation of 21 people. I left others still doing the work. I was overwhelmed by emotion.”
Muhutari Dan Niger said the blast “destroyed most of the shops around the scene”, adding: “I saw at least 23 dead bodies and over 20 with various injuries.”
The Borno state police was not immediately available for comment when contacted by AFP.
Borno has been worst hit by an upsurge in violence since Muhammadu Buhari became president on May 29, vowing to crush Boko Haram.
At least 1,100 people have been killed since his inauguration, according to AFP reporting.
Busy markets, mosques and bus stations have been prime targets for suicide and homemade bomb attacks.
