Nigeria’s Inflation Hits Record High

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Inflation rate in Nigeria stood at 18.3 % in October, rising from 17.9 percent in September, the highest in 11 years.

According to a report released on Monday by the National Bureau of Statistics, NBS, the persistent rise in the price of goods and services was due to exchange-rate.

Inflation has been on the up side partly due to dollar shortages brought about by the huge drop in the price of crude, Nigeria’s main export, since mid-2014, pushing up import costs for consumer goods and machinery.

The federal government has struggled to manage the economic fallout, at one point pegging the exchange rate for more than a year and recently using the Department of State Services, DSS, to clampdown on Bureau De Change operators in an apparent move to bring down the street price of dollars.

Analysts fear this may not be the worst of the recession; one suggesting that “We may see it approaching 19 percent before the end of this year.”

CBN Governor, Godwin Emefiele, had retained interest rates at 14 percent in September, irrespective of calls by Finance Minister, Kemi Adeosun to consider a downward review so as to boost growth.

The new interest rate is expected to be announced after a meeting of the Monetary Policy Committee of the CBN on November 22.

John Ashbourne, a London-based economist believes that the October inflation rate will put more pressure on the central bank to further tighten monetary policy.

He predicted that the CBN may hike its key policy rate from 14 percent to 16 percent at its next meeting.






     

     

    The NBS is expected to release the Gross Domestic Product, GDP, growth data for the third quarter on November 21, though a forecast by the International Monetary Fund, IMF, shows that GDP will shrink by 1.7 percent this year.

    According to the NBS report, Food prices rose to 17.1 percent in October from 16.6 percent in September, driven by increases in the price of bread, cereal, fish and meat.

    The average gasoline price was 0.3 percent lower in October than in the previous month.

    Meanwhile, the naira strengthened 0.4 percent to 314.25 per dollar as at Monday morning in Nigeria’s commercial capital, Lagos.

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