Nigeria’s inflation rate to hit Worst level in 27 years

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BY NIYI JACOBS

The National Bureau of Statistics (NBS) released Nigeria’s monthly Consumer Price Index (CPI) report for Nigeria last week Friday, revealing a headline inflation rate of 28.2% for November 2023.

This according to the Bureau, represents the eleventh consecutive month of increase so far in the year and the highest level since July 2005 (over 18 years).
Year-to-date, Nigeria’s inflation rate has increased by 7.21% points, the fastest pace recorded since the economic recession in 2016.

Further breakdown of the report showed that the surge was largely driven by the food prices, which have been negatively affected by insecurity in the food-producing regions, rising transport costs, and flooding, amongst other underlying factors.

While Nigeria has been grappling with a double-digit inflation rate over the last 7 years, the cannon that broke the horseback was the removal of the petrol subsidy in May 2023 by the new administration of President Tinubu saw the rate surge at unprecedented levels not seen in decades.

Currently, Nigeria is trailing its worst inflation level in over 18 years as of November 2023. However, a simple time series forecast shows that Nigeria’s inflation rate will rise to at least 28.28% in December, all things being equal. This would effectively bring Nigeria’s inflation to its worst level since 1996 (over 27 years).

According to the NBS, the major drivers of Nigeria’s inflation in November 2023 were food and beverages, road and air transport, pharmaceutical drugs, and accommodation amongst others.

Specifically, food and non-alcoholic beverages contributed 14.61% to the headline inflation in the review month, followed by housing, water, electricity, gas and other fuel with 4.72%, while clothing and transport contributed 2.16% and 1.84% respectively.