Nigeria Inflation Continues Upward Spiral to  20.77% on Naira Weakness

Nigeria Inflation Continues Upward Spiral to  20.77% on Naira Weakness

Nigeria’s annual inflation continued its upward swing to 20.77 percent in September, as food costs and exchange rate pressures took their toll on prices, according to  latest consumer-price report by the National Bureau of Statistics.

 “This indicates that in the month of September 2022 the general price level was 4.14% higher relative to September 2021,” the statistics agency said in the report posted on its website.  On month-on-month terms, the September inflation rate of 1.36 percent is 0.4 percent lower than the 1.77 percent recorded in August.

The food index rose to 23.34 percent in September, compared with 23.12 percent in August, though though the rate fell by 0.54 percent during the month on the back of lower prices for some food items such as tubers, palm oil, maize, beans and vegetables. Major items such as potatoes, yam as well an oil and fat recorded increases.

In response to accelerating inflation, Central Bank of Nigeria’s Monetary Policy Committee has raised its benchmark interest rate  for the third time in September to 15.5 percent with a 150-basis-points hike.  But pressure from rising food costs and weakening naira have continued, translating into  higher costs for imports.

The impact of the Ukraine war is being felt in higher energy and food costs that have  stretched government finances. Unrest in the Niger Delta oil region and the consequent loss of output, have meant that the government can’t meet export revenue targets, the main source of government funding.