Price Volatility in Domestic market triggers inflation in Nigeria
- Inflation accelerated to 12.4% in May from 12.3% in April
- Food inflation rate rose to 15.04%, highest since March 2018
- Costs increased 1.17% in the month.
High Food Costs and Weak Currency is pushing inflation in Nigeria. Spates of contigency exarcebated by the onslaught of the pandemic has seen Africa's most populous nation on bended knees.
Nigeria’s inflation rate rose for the ninth straight month in May as food prices continue to climb and the currency remain under pressure.
Consumer prices rose 12.4% from a year earlier, compared with 12.3% in April, the Abuja-based National Bureau of Statistics said in a report published on Twitter Wednesday.
Insecurity and inter-state travel
Food inflation quickened to 15.04%, the highest rate since March 2018. Prices are being pushed up as clashes between herders and farmers cause insecurity and inter-state travel is disrupted by the coronavirus pandemic.
Interest rate slashed to its lowest in four months
- The Central Bank of Nigeria unexpectedly cut its key interest rate to the lowest in four years last month in an effort to avert a recession in Africa’s largest economy that’s been pummeled by the plunge in oil prices and the pandemic.
Border closure to stem the outbreak of COVID19 has a bearing on the domestic markets
- Inflation in Nigeria has been above the 9% upper limit of the central bank’s target band for five years and will likely continue to accelerate as border closures, initially ordered in August to curb smuggling of rice and other products, remain in place.
|The fiscal condition that COVID-19 has brought upon Nigeria was almost predictable on the basis of the country’s huge reliance on oil which prices frequently fluctuate.
Experts in energy economics have offered the federal government proposals on how to move Nigeria away from its high dependence on oil for revenue which has left the country susceptible to external shocks.
“We need to look away from oil as a revenue generator but as value addition to the development of Nigeria. Countries have done it. Our federal constitution is about sharing and not producing. We should rework our constitution to bake the cake and not share the cake. - President of Nigerian Association of Energy Economics (NAEE), - Prof. Yinka Omorogbe