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Concerns over Nigeria’s inflation-free rise- Expert explains



Nigeria’s rising inflation rate has raised concerns among economic stakeholders and citizens at large. The country has witnessed its twelfth inflation increase in recent times.

It is worth noting that the December inflation rate represented Nigeria’s first drop in 2022. The figure dropped from 21.47 per cent in November to 21.34 per cent in December.

But, two months into 2023, Nigeria’s inflation has skyrocketed.

According to the National Bureau of Statistics, in December 2022, the inflation rate jumped from 21.34 per cent to 21.91 per cent in its recently announced February 2023 rate.

February’s rate showed an increase of 0.09 per cent points.

The NBS disclosed this on Wednesday in its report titled ‘Consumer Price Index (February 2023)’.

In perspective, the figure showed that for the last Twelve months, Nigerians have been paying more for the prices of goods and services.

Food prices, the most relevant in the CPI basket, climbed further to 24.35% in February after jumping by 24.32% in the preceding month.

The report comes as the country is beginning to heave a sign of relief after two months of naira scarcity occasioned by the naira redesign policy of the Central Bank of Nigeria, CBN.

The report indicated that “In February 2023, the headline inflation rate rose to 21.91% compared to January 2023, which was 21.82%.

“Looking at the trend, the February 2023 inflation rate showed an increase of 0.09% points when compared to January 2023 headline inflation rate”.

In an interview with DAILY POST on Thursday, a financial expert, the CEO of SD&D Capital Management Limited, Idakolo Gbolade, stated that the naira crisis, exchange rate fluctuations, forex scarcity and others are a signpost to the latest inflation figure.

“The inflationary pressures cannot subside because of the current monetary policy direction of the CBN. The factors affecting inflation, exchange rate fluctuations, forex scarcity, high cost of goods and services, high-interest rates and reducing purchasing power coupled with insecurity have not been adequately addressed, so the inflationary trend might not decrease in the coming months if urgent steps are not taken to address these various issues. The Naira redesign policy has also contributed to the rise in inflation.

On the coming Monetary Policy Committee Meeting scheduled for 20 to 21 march 2023, Gbolade projected a 0.5 to 1 basis point MPR increase to curb inflation.

“The CBN might increase the MPR by 0.5 to 1 basis point to curb inflation, but it will be better for the MPC to hold instead of increasing the rate”, he stated.

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