According to official statistics released on Friday, Nigeria’s annual inflation rate increased to an 18-year high of 25.8% in August as the continent’s largest economy battles rising prices in advance of the central bank’s interest rate decision later this month.
President Bola Tinubu scrapped exchange restrictions and eliminated a popular but expensive decades-old gasoline subsidy in May. This enraged unions, who have threatened strikes and caused prices for everything from food to transportation.
According to the National Bureau of Statistics (NBS), the inflation rate increased for an eighth consecutive month from July’s 24.08%, aggravating a cost of living issue made worse by Tinubu’s policies.
According to official figures, Nigerians experienced this inflation last in August 2005.
Inflation in Nigeria increased more quickly than anticipated in August, which is generally a month of seasonally low inflation pressures, according to Razia Khan, managing director and chief economist for Africa and the Middle East at Standard Chartered.
According to economic analysts, some of the main causes of Nigeria’s inflation include the depreciation of the naira, rising gasoline and food prices, logistical expenses, and an expansion of the money supply.
“We believe the inflation data only partially reflects the subsidy’s removal. According to Khan, the continuous devaluation of the naira on the black market and Nigeria’s stance on monetary policy in the months before the conclusion contributed significantly to the pre-existing pressure,
Contrary to economists’ predictions, the central bank increased interest rates in July by a smaller-than-expected 25 basis points. On September 26, rates are scheduled to be set again, and some analysts anticipate a more hawkish approach.
According to the NBS, food inflation, which makes up most of Nigeria’s inflation basket, increased to 29.34% in August from 26.98% in July as the cost of essentials increased.
Tinubu declared he won’t renege on changes after a panel upheld his contested victory last week in the February presidential election. According to labor unions, recent measures have harmed people experiencing poverty and should be undone.
