Nigeria’s Inflation Accelerates for 13th Month, Now at 13.7%

By Chuks Emele

Thursday, 15 October 2020

Nigeria’s annual inflation accelerated for the 13th consecutive month in September to 13.7 percent, surging on the back of increasing food costs and a weakened naira.

It’s a jump of 5 percentage points from 13 2 percent recorded in August, according to data published on Thursday by the National Bureau of Statistics. Prices rose 1 5 percent month-on-month.

The food index showed the biggest increase in the basket of measures that determine the rate if inflation, rising 16 7 percent from a year earlier and 1.9 percent from the previous month.

Food costs a key driver of inflation.

Food supply in Nigeria has been constrained by insecurity in the major food producing of areas of central and northern Nigeria, a situation made worse by months of lockdown to contain the spread of coronavirus.

The sharp drop in oil demand and prices hit Nigeria at its most vulnerable, oil being its main export accounting for more than 90 percent of foreign income. This has in turn increased pressure on the exchange rate of the naira in the face of inadequate foreign-currency supply to fund imports.

One of the consequences is that though the central bank set a target of keeping inflation between 6-9 percent,  it has missed this mark now for more than five years.