The National Bureau of Statistics reported that the latest inflation figure, 25.80 percent, is the highest since August 2005. Inflation has been skyrocketing since May, when it stood at 22.41 percent. In June, inflation was 22.79 percent, in July it was 24.08 percent, and in August it was 25.80 percent.
The floating of the Naira at the foreign exchange market in June has worsened the situation.
President Bola Ahmed Tinubu phased out the fuel subsidy in June, leading to the selling of petrol at N600/per litre from N180/per litre. The development was followed by the introduction of forex reforms, which saw the country’s currency exchanging at N915/$1 at the parallel market as of Monday from N720/$1 in June 2023. At the official market, the exchange rate jumped from N465/$1 to N720/$1 in June same year.
These policies have had a ripple effect on the prices of food, transportation, goods and services nationwide in the last three months.
The increment of fuel pump price and depreciation of Naira at the forex market have been reflected in the country’s inflation rate. From May to August, Nigeria’s inflation rate jumped by 3.39 per cent; this is compared with the 0.38 per cent increase recorded in June when the fuel subsidy removal and forex reforms were introduced.
To move against inflation rise, the CBN in July voted to tighten monetary policies with interest rate hiked to 18.75 from 18.50 per cent.
However, the move by the Nigeria Central Bank of Nigeria to address the soaring inflation has not yielded results.
Experts are optimistic about a change following the appointment of Olayemi Cardoso as the Governor of CBN.
In an exclusive interview with Atlantic Reporters on Monday, Dr Ayo Teriba, the Chief Executive of the Economic Associates, said unless the forex market is stabilized, the country’s inflation will continue to rise. He noted that the inflation rate rise in Nigeria is not a problem of CBN but of the generality of the country.
Other experts have also advised the new CBN Governor to review the previous policies and design what would best work for the country.