AN analysis of Nigeria’s consumer price index has shown that the country’s inflation rate rose 59 times under President Muhammadu Buhari’s eight-year administration.
Buhari, upon assumption of office as the president in May 2015, started with an inflation rate of 9 per cent, but will be handing over power on May 29, 2023, with the rate at a 13.22 per cent increase.
The National Bureau of Statistics (NBS) had recently disclosed that the country’s inflation rate rose to 22.04 per cent in April 2023. This is the fourth consecutive increase this year and the highest rate recorded under the administration.
The data bureau said, “Looking at the movement, the April 2023 inflation rate showed an increase of 0.18% points when compared to March 2023 headline inflation rate.
“Similarly, on a year-on-year basis, the headline inflation rate was 5.40% points higher compared to the rate recorded in April 2022, which was 16.82%. This shows that the headline inflation rate on a year-on-year basis increased in April 2023 when compared to the same month in the preceding year.”
The ICIR had reported how the increase in food prices was in contrast with the Federal government’s claim of attention to food sufficiency in Nigeria.
While several economic policies and setbacks like recession, the closing of the border, the COVID-19 pandemic, climate crises and cashless policies contributed to this, experts told The ICIR that the country needs to strengthen its implementation policies around the production economy, not consumption.
The data gathered revealed that within the eight years, inflation consistently rose from January to December in 2016 and 2020. On average, the inflation rate rose more in 2017, 2021 and 2022.
Analysing the numbers
After Buhari’s inauguration in May 2015, the inflation rate rose to 9.2 per cent in June, from 9.0 in the previous month. The rate was sustained till August and September when it rose to 9.3 and 9.4 per cent, but dropped in October. In November and December 2015, it had risen to 9.37 and 9.55, respectively.
In 2016, the country fell into a recession that contracted the economy by 1.6 per cent due to the decline in oil and non-oil production stock. This had an effect on the country’s inflation rate. For 13 months consecutively, the inflation rate rose by 9.1 per cent from January 2016 (9.62 per cent) to January 2017 (18.72 per cent).
However, it had a long drop of 6.64 per cent from February 2017 (17.78 per cent) to July 2018 (11.14). This was the only time in the administration where the rate did not increase for 18 months consecutively. The rate slightly increased in 2018 by 0.05 per cent between August (11.23 per cent) and September(11.28 per cent); and 0.16 per cent between November(11.28 per cent) and December (11.44 per cent).
In 2019, the inflation rate increased in January (11.37 per cent), April (11.37 per cent), and May (11.4 per cent).
In August 2019, the Federal government shut the land borders to crack down on smuggling activities. While the government claimed that the closure helped the economy, some believed it increased hardship.
During this closure, the rate increased by 6.93 per cent, from September 2019 (11.24 per cent) to March 2021 (18.17 per cent). Within this year, the country was hit by a pandemic which suspended the global economy and entered into another recession.
The rate rose in February 2022 from 15.7 per cent to 21.47 per cent in November. This was the first time under the administration that the inflation rate would increase beyond 20 per cent.
Meanwhile, factors like the cash withdrawal policy and the Russia-Ukraine war also played a significant role in the rising inflation rate this year. From January, the inflation rate grew from 21.82 per cent to 22.22 per cent in April.
The Director of the Centre for the Promotion of Private Enterprises (CPPE), Muda Yusuf, told The ICIR that the Nigerian economy is not credit-driven, making it very challenging for small and medium businesses to account for nearly 50 per cent of the economy.
Yusuf said, “The trend of the CBN monetary policy over the last few years has been that of policy tightening aimed at taming inflation. But this policy choice has failed to reckon with domestic peculiarities driving inflation. The key drivers of Nigeria’s inflation are supply-side variables, not demand-driven.”
He said the Federal government would need to address the security concerns disrupting agricultural activities, reform the foreign exchange market to stabilise the exchange rate, fix the structural problems to boost the productivity and competitiveness of domestic firms, and manage climate change consequences to reduce flooding and desertification.
Also, the team lead of Soilless Farm Lab, Samson Ogbole, noted that the incoming administration would need to understand the country’s macro-economic environment and expand local production.
“We need to work on being able to be food secure, processing of food, eliminating food waste and think about how to create more options for our food,” Ogbole said.