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- Nigeria’s annual inflation slowed by 0.03 percentage point to 15.60% in January
- This was revealed by the statistics office. Inflation has been in double digits since 2016
- It was particularly high in December due to a surge in demand during the Christmas season, according to the National Bureau of Statistics
- \Dollar shortage is said to be the main reason for December peak of the inflation as the import bill of the country is surging
Nigeria’s annual inflation slowed by 0.03 percentage point to 15.60% in January. This was revealed by the statistics office. Inflation has been in double digits since 2016. It was particularly high in December due to a surge in demand during the Christmas season, according to the National Bureau of Statistics.
Dollar shortage is said to be the main reason for December peak of the inflation as the import bill of the country is surging. This prompted the government to put restrictions on foreign exchange supplies on certain items. This had exerted pressure on the price line.
Nigeria faces fuel shortage, of late, which could stoke inflation because of the cascading effect of fuel on the economy. Lack of refining capacity is a major concern for the oil rich country, which exports crude oil to import refined oil at a higher premium, causing drain in Nigeria’s foreign exchange.
Nigerian authorities maintain that persistent inflationary pressures are structural and linked to deficits. According to them, it is not due solely to constraints in the money supply. It is mostly imported inflation.
Food price inflation, The major headline component, decreased by 0.24 percentage points in January to 17.13%. Core inflation, excluding prices of farm produce, was flat at 13.87%. Persistent double-digit inflation could cause pressure on the central bank to reconsider its dovish stance on interest rates. Economic growth is still fragile, hovering over 4% on an annual basis in the third quarter. The rate of growth slowed compared with the previous quarter.
