Nigeria is grappling with a surge in inflation, reaching 27.33 percent in October, according to the National Bureau of Statistics (NBS). The report outlines a concerning upward trajectory, attributing the rise to various factors, including a significant increase in food prices.
- Overall Inflation:
- Annual inflation rose by 0.61 percentage points, reaching 27.33% in October 2023.
- Year-on-year, this marks a 6.24% increase compared to October 2022, signaling a persistent inflationary trend.
- Food Inflation:
- The food inflation rate spiked to 31.52% year-on-year, with a notable 7.80% increase compared to October 2022.
- Contributing factors include the escalating prices of bread, cereals, oil, fat, potatoes, yam, fish, fruit, meat, vegetables, and dairy products.
- Economic Factors:
- Government policies, including the removal of subsidies on petrol by President Bola Tinubu, have contributed to the economic challenges.
- The depreciation of the naira by over 50 percent, following the centralization of forex markets, adds strain to the situation.
- Policy Response:
- In an attempt to curb inflation, the Central Bank of Nigeria (CBN) raised the benchmark lending rate to 18.75 percent in July.
- The CBN stated that this measure has made a significant impact in moderating inflation, with potential benefits expected from recent efforts to unify forex markets.
- Government Intervention:
- President Tinubu declared a State of Emergency on food insecurity in July, emphasizing the inclusion of food and water-related matters in the National Security Council’s purview.
Contributing Factors to Inflation:
The NBS’s divisional analysis reveals that major contributors to the inflation surge include food and non-alcoholic beverages, housing, water, electricity, gas, fuel, clothing, footwear, and transport.
The report indicates a 1.73% month-on-month inflation rate in October, slightly lower than September’s 2.10%. This suggests a moderation in the rate of increase in the average price level.
Nigeria’s economy faces a challenging period marked by persistently high inflation, particularly in the food sector. Government interventions and monetary policy adjustments aim to mitigate the impact, but the situation underscores the need for comprehensive and sustained measures to stabilize the economy and ease the burden on the population.