Nigerian economy continues to nosedive as recent inflation report confirmed all is not well with Africa’s largest economy.
The consumer price index data shows price of goods and services in the economy grew than expected in March, pushing inflation rate to 12.8 percent on an annualized basis, this is the highest inflation rate in almost four years, according to the National Bureau of Statistics, NBS, report on Tuesday.
Food prices surged 12.7 percent in March, compared with 11.4 percent recorded in February its obvious increase in transportation costs driven by on-going fuel scarcity is partly responsible for recent surge in food prices.
Since Nigerian central bank pegged the Naira at 197-199 per dollar in March 2015 and restricted dollar usage in the economy by ensuring domiciliary account users withdraw in local currency, the US dollar widely use in Nigeria has gained around 52 percent against the Naira on the black market.
Making imports more costly for a nation that’s a net importer of refined fuel and food products.
John Ashbourne, an economist at Capital Economics Ltd. in London, said by phone on Tuesday “It looks like the fuel problem won’t go away in the short term, and we think inflation could rise to 14 or 15 percent this year.”
He further stated “the inflation rate could add pressure to accelerate further interest-rate increases.”