Nigeria’s Inflation Surges Towards 3-Decade High Despite Naira Strengthening Against Dollar
Amidst the recent gains by the Naira against the dollar, Nigeria’s inflation rate remains unabated according to data released by the National Bureau of Statistics on Monday, April 15, 2024.
Over the last few weeks, the Naira has appreciated, becoming the world’s best-performing currency. After losing over 70 percent of its value in less than a year, the Naira gained 14 percent in March and has already rallied 12 percent this month.
Despite the recent gains, Nigeria is witnessing one of its worst inflation rates in almost three decades, which has eroded citizens’ purchasing power, driving millions of Nigerians into poverty.
According to the new data, headline inflation increased from 31.7 percent in February 2024 to 33.2 percent in March.
“Looking at the movement, the March 2024 headline inflation rate showed an increase of 1.50 percentage points when compared to the February 2024 headline inflation rate,” said the NBS, the main agency responsible for the development and management of official statistics.
To reduce soaring inflation, the Central Bank of Nigeria (CBN), led by Yemi Cardoso, had increased the Monetary Policy Rate (MPR) from 18.75 percent to 22.75 percent in late February 2024. A month later, the apex bank increased it again to 24.75 percent during a second Monetary Policy Committee meeting in Abuja on March 26, 2024.
“From our perspective, the key thing is to be fully focused on our core mandate to fight inflation and stabilise the economy. The purchasing power of the average person should be restored to the level it should be,” said Cardoso.
But Nigerians are yet to feel the impact of the policy as food inflation increased by over 15 percent on a year-on-year basis.
“The food inflation rate in March 2024 was 40.01 percent on a year-on-year basis, which was 15.56 percentage points higher compared to the rate recorded in March 2023 (24.45%),” said the NBS.
