UPDATED: Nigeria’s Inflation Hits 32-month Peak

 

 

Reopening Nigeria's borders to trade has failed to, immediately, arrest the inflation and relentless climb in the cost of living.

Nigeria’s headline inflation rose to 15.75 per cent in December, its highest level in 32 months, the National Bureau of Statistics said on Friday.

The figure is an indication that President Muhammadu Buhari’s order in December reopening the country’s land borders to trade has not immediately succeeded in arresting galloping in food prices.

Inflation touched 14.89 per cent in November, with the 0.86 per cent month-on-month increase in December figure marking the 16th consecutive month inflation would increase in Nigeria.

That will complicate recovery efforts for Africa’s largest economy, which slipped into its second recession in four years and the worst in nearly forty years in the third quarter of 2020, after recording two contractions in a row.

It will also heap further pressure on cost of living and disposable income, while weakening consumer spending.

“Rising Inflation rate is a serious consumer pressure point, and reduces consumer purchasing power over time,” Samuel Bamidele, a Lagos-based financial research analyst told PREMIUM TIMES.

“Inflation rate at 15.75% in December 2020 is obviously not good for the economy, and particularly in an economy characterised by single-digit interest rate on investment,” he added.

Inflationary pressures have never abated since the Buhari administration announced a shutdown of Nigeria’s porous land borders with all neighbours in October 2019 in a move seeking to spur mass production of food as well as curb smuggling and associated corruption.

This alongside banditry attacks on farms and deluge of rain submerging paddy fields in northern Nigeria, a region largely known for low rainfall, has been accelerating food costs.