Nigeria’s annual inflation rate increased to 24.08% in July from 22.79% in June, which worsened the continent’s largest economy’s cost-of-living crisis as President Bola Tinubu’s reforms continue to take hold. This was the country’s highest annual inflation rate in over 20 years.
Since 2016, Nigeria has seen double-digit inflation, which has eroded savings and wages and forced the central bank to raise interest rates to their highest level in almost two decades. The naira has been devalued by more than 40% as a result of Tinubu’s audacious measures, which included lifting limits on foreign exchange trading and eliminating a popular but expensive gasoline subsidy. Inflation in Nigeria, which makes up the majority of the country’s inflation basket, increased to 26.98% in July from 25.25% in June. The statistics office stated that rises in the prices of fish, potatoes, yams, and other tubers, fruits, meat, vegetables, milk, cheese, and eggs were to blame for the rise in food inflation on a year-over-year basis. A weaker currency and the loss of fuel subsidies, according to analysts like the World Bank, are expected to cause inflation to increase in the near future. After the naira hit a record low on the parallel market due to dollar shortages on the official market, where the currency has also deteriorated since the devaluation, acting central bank governor Folashodun Shonubi stated on Monday that plans were ongoing for steps that would affect the currency market. The bank increased its primary lending rate by 25 basis points to 18.75% in July at its first monetary policy meeting following Tinubu’s suspension of central bank governor Godwin Emefiele. As prices rise as a result of his reform agenda, Tinubu, who is under criticism, has defended his course of action by claiming that Nigeria has saved over a trillion naira in just over two months since reforms were initiated.
