Nigeria’s Inflation Hits 24.08% As Food Prices Rise

 

 

Nigeria’s annual inflation rate rose to 24.08 per cent in July from 22.79 per cent in the previous month, the National Bureau of Statistics (NBS) said Tuesday.

The NBS said on a year-on-year basis, the headline inflation rate was 4.44 per cent points higher compared to the rate recorded in July 2022, which was 19.64 per cent.

“This shows that the headline inflation rate (year-on-year basis) increased in July 2023 when compared to the same month in the preceding year (i.e., July 2022),” it said.

According to the report, the food inflation rate increased to 26.98 per cent in July from 25.25 per cent in June.

Although the prices of food have been on the rise across Nigeria in recent years, the situation deteriorated due to the impact of government policies such as the removal of subsidy on petrol, among others.

On 29 May, during his inauguration, President Tinubu announced the removal of subsidy on petrol. This development has caused hardship for many Nigerians with its attendant increase in the prices of goods and services.

Apart from the removal of subsidy, the Central Bank of Nigeria (CBN) also announced the unification of all segments of the forex exchange (FX) market as part of efforts to engender transparency in the markets and boost investors’ confidence.

The policy has been widely applauded as well-intentioned and necessary but it has put additional pressure on the local currency and manufacturers, with ripple effects on prices.

Inflation has remained high in Africa’s largest economy, prompting the apex bank to hike interest rates to their highest levels in nearly two decades.

In July, the Central Bank of Nigeria (CBN), raised its benchmark lending rate to 18.75 per cent.

The bank said, “hiking the interest rate has made a lot of difference in moderating the rate of inflation”.

It noted that the option to continue the hike in the policy rate, albeit moderately, also presented a strong alternative premised on the expected liquidity injections into the economy from the recent efforts to unify the nation’s foreign exchange markets.

State of Emergency

Mr Tinubu had in July declared an immediate State of Emergency on food insecurity to tackle the increase in food prices.

He also directed that “all matters pertaining to food & water availability and affordability, as essential livelihood items, be included within the purview of the National Security Council.”