Inflation in Africa’s largest economy Nigeria moderated further in the month of July, according to the latest report from the National Bureau of Statistics (NBS).
The Consumer Price Index (CPI) which measures the inflation rate rose by 17.38 percent year-on-year in July, this was 0.37 percent lower than the 17.75 percent recorded in the month of June. Suggesting that despite the continuous rise in the price of goods and services in Nigeria, data from NBS is showing otherwise.
On a monthly basis, inflation increased by 0.93 percent in July. Again, this was 0.13 percent lower than the 1.06 percent achieved in June 2021.
Rising foreign exchange rate amid chronic dollar scarcity has pushed prices – of import items largely used by businesses operating in the country as input materials or resell – off the roof.
Presently, the Nigerian Naira is trading at N515 to a United States Dollar at the parallel market known as the black market. Down from N485/US$1 it was exchanged in May 2021 before the Central Bank of Nigeria (CBN) halts forex allocation to bureau de change operators in the country.
However, weak foreign reserves, rising debt servicing cost, low foreign revenue generation and drop in crude oil production are hurting CBN’s ability to service the economy with sufficient forex, hence the increase in prices of goods and services on the ground given the Nigerian economy structure as an import-dependent economy.
Food Index also increased at a slower pace of 21.03 percent year-on-year in July when compared to 21.83 percent filed in June 2021.
NBS noted that increases were recorded in prices of Milk, Cheese and Eggs, Coffee, Tea and Cocoa, Vegetables, Bread and Cereals, Soft drinks, and Meat.
On a month-on-month basis, the food index grew by 0.86 percent in July, again down from 1.11 percent in June.