The increase in Nigerian food and airfare prices over the past year continues to show up in the data. Nigerians spent 19.64% more on goods and services in July than the same month last year, according to the latest inflation report (pdf) released today (15 August) by the Office of National Statistics.
With this figure, Nigeria has now seen six consecutive months of rising inflation. Inflation in July 2022 is the highest in Nigeria since 2005.
Rising food and gas prices drive inflation in Nigeria
Since the beginning of this year, a wave of rising inflation has affected many countries around the world. Interest rates have doubled in 37 of 44 advanced economies since 2020, according to the Pew Research Center.
In West Africa, Ghana and Nigeria are among the worst affected, with Ghana after inflation hits its highest level Seeking help from the International Monetary Fund hit a 19-year high of 29.4% in June. Inflationary pressures have led Ghana’s central bank to raise lending rates by 6.6 percent this year, according to McKinsey & Company. Only Argentina has raised interest rates.
Nigeria, still Africa’s largest economy, has not raised lending rates as quickly as its neighbors this year. But reports from its statistics agency show President Muhammadu Buhari’s government is in a year-long fight to curb rising prices and is arguably affected by the knock-on effects of previous policies, such as the two-year closure of land borders .
July rates were in line with analysts’ expectations. “Secret adjustments in gasoline prices and rising energy prices in rural areas are the main drivers of inflation,” said Ibukun Omoyeni, an economist at Lagos-based fund management and securities firm Vetiva Capital. Nigeria’s mid-July gasoline price hike, But it has not been officially announced. It appears to come from an agreement between federal government officials and oil marketers.
Supply chains for importing food raw materials into Africa continue to be affected by the Russian-Ukrainian war, so competition from local producers for alternative sources remains intense. Food prices in Nigeria rose 22.02% in July from a year earlier. The statistics agency said the items most responsible for this food bloat were bread, grains, tubers, meat, fish, oils and fats.
