Nigeria’s Inflation Rate Rises Less Than Forecast

• Nigeria’s Inflation Rose Less Than Forecast in December

The cost of living in Nigeria rose less than forecast in December, following a series of measure put in place by the central bank to moderate the persistent rise in prices of imported goods in the country.

The consumer price index which measures inflation rose from 18.48 percent in November to 18.55 percent in December, the National Bureau of Statistics reported on Friday.

According to the report, the surge in the price of electricity, housing, water, clothing, footwear and education, slightly increase the index by 0.07 percent.

It reads in part, “During the month, the highest increases were seen in housing, water, electricity, gas and other fuels, clothing and footwear, and education.”

“Communication and restaurants and hotels recorded the slowest pace of growth in December, growing at 5.33 per cent and 8.91 per cent (year-on-year) respectively.

On a critical look into the details of the report, the inflation rate appears cooling in recent months, when compared with the rate of increase in the early months of 2016.

For instance, costs rose 0.48 percent in October, surged 0.15 percent in November and increased by 0.07 percent in December. This shows the rate of increase is declining and likely to continue going forward, especially if the CBN fulfilled its promise of prioritising foreign exchange allocation to manufacturers in the first quarter of 2017.

However, analysts at Investors King Ltd., are optimistic that inflation rate will start declining in the first quarter of the year as the increase in business confidence due to OPEC successful consensus is likely to renew investment rush and attract enough capital importation needed to offset current forex deficit.