Food prices rise as Nigeria’s inflation rate hits 25.80%. 

Food prices rise as Nigeria’s inflation rate hits 25.80%. 

Nigeria’s yearly inflation rate has increased to 25.80 percent in August from 24.08 percent in the preceding month, as reported by the National Bureau of Statistics (NBS) on Friday. 

The statistics bureau reported that the headline inflation rate for August 2023 has risen by 1.72 percentage points in comparison to the July 2023 headline inflation rate. 

The NBS reported that in comparison to the inflation rate of 20.52 percent recorded in August 2022, the headline inflation rate increased by 5.27 percentage points. 

“This shows that the headline inflation rate (year-on-year basis) increased in August 2023 when compared to the same month in the preceding year (i.e., August 2022),” it said. 

According to the report, the food inflation rate in August rose to 29.34 per cent on a year-on-year basis, which was 6.22 per cent points higher compared to the rate recorded in August 2022 (23.12 per cent ). 

Food prices have been increasing throughout Nigeria in recent years. The situation worsened due to the effects of government measures like the elimination of subsidies on gasoline, among other factors. 

Recall that on 29 May, during the inauguration, President Bola Tinubu announced the removal of subsidy on petrol. This development has caused hardship for many Nigerians, with its attendant increase in the prices of goods and services.

In addition to the elimination of subsidy, the Central Bank of Nigeria (CBN) also declared the consolidation of all sectors of the foreign exchange (FX) market as a means to promote openness in the markets and enhance investors’ trust 

The policy has been widely praised as well-meaning and essential but has placed added strain on the domestic currency and producers, resulting in cascading impacts on prices. 

Prompted by high inflation in Africa’s largest economy, the central bank has hiked interest rates to their highest levels in nearly two decades. 

In July, the Central Bank of Nigeria (CBN), raised its benchmark lending rate to 18.75 per cent.

The bank said, “hiking the interest rate has made a lot of difference in moderating the rate of inflation”. 

Also noted was the strong alternative of continuing hike in the policy rate, albeit moderately, premised on the expected liquidity injections into the economy from the recent efforts to unify the nation’s foreign exchange markets.