Nigeria inflation isn’t cooling; at nearly 30% in January

Nigeria consumer prices rose further in January to nearly 30% as inflation shows no sign of cooling amid growing hardship across the country.

Inflation rose for the 13th straight month to a staggering 29.90% in the year ending January, from December’s 28.92%, data from the National Bureau of Statistics showed.

It is the highest since 1996.

Persistent price rise has eroded incomes and savings and has left many families in a country of over 220 million people struggling to feed.

Food inflation rose to 35.41% in January, from 33.93% in December. The food and non-alcoholic beverages category was the biggest driver of inflation in January in annual terms.

Prices of food have continued to soar for many reasons, including insufficient production as swathes of farming areas have been taken over by armed criminals who attack farmers for ransom.

Naira, which suffered a second devaluation in less than a year last month, is a key factor behind price pressures alongside energy and logistics costs associated with infrastructure problems.

Inflation, which was already at a record high under the administration for former President Muhammadu Buhari, worsened since June after President Bola Tinubu’s removed petrol subsidy and his government’s devalued the naira.

Vice President Kashim Shettima said on Tuesday that the government planned to set up a commodity board to regulate the price of grains and other items to curb food costs and support smallholder farmers who dominate production.

Interest Rate

Many analysts believe the inflationary pressure would convince the central bank to deliver a large interest rate hike when it meets later this month.

The central bank governor, Olayemi Cardoso, faces pressure to raise interest rates when the bank’s Monetary Policy Committee (MPC) meets on February 26-27 for the first time since he took office in September.

The MPC raised rates by a combined 725 basis points to 18.75% between May 2022 and July, when it last met.