The largest economy in Africa saw a deteriorating cost-of-living issue in November when Nigeria’s annual inflation increased for the eleventh consecutive month to the highest level in eighteen years. This increased pressure on the central bank to address the rise.
November consumer inflation increased to 28.20% from 27.33% in October, according to figures released on Friday by the National Bureau of Statistics.
According to official figures, Nigerians have not seen inflation this high since August 2005.
The World Bank issued a warning to Nigeria on December 13 about the need to manage inflation. The central bank was also given instructions to tighten monetary policy, increase market confidence in free foreign currency pricing, and gradually stop making so-called “ways and means” advances to the government.
According to the statistics agency, increases in the prices of food and non-alcoholic drinks were the main cause of annual inflation in November.
The majority of Nigeria’s inflation is attributed to food inflation, which increased to 32.84% in November from 31.52% in October.
To control inflation, Olayemi Cardoso, the newly appointed governor of the central bank, has promised to gradually phase out the institution’s fiscal intervention programs.
After resuming its Open Market Operations (OMO) to aid in controlling the money supply, Cardoso stated that the central bank intends to tighten policy during the following two quarters to control inflation.
Nigeria has suffered from low oil revenue, shortages of foreign cash, and theft of crude oil, its primary export and source of foreign exchange earnings, even after President Bola Tinubu launched the country’s most ambitious reforms in decades.
The depreciation of the naira, rising fuel and food prices, logistics expenses, and an expansion of the money supply, according to analysts, are some of the main causes of Nigeria’s inflation.
Nigeria, the most populous country in Africa, has had double-digit inflation since 2016, which has eaten away at earnings and savings even as the central bank raised interest rates at its most recent meeting to levels not seen in almost 20 years.
At its most recent monetary policy meeting in July, the central bank decided against raising interest rates by as much as 25 basis points as anticipated, stating that a mild increase would better stabilize inflation expectations while still promoting investment.
