Nigeria’s inflation hits 28-year high at 34.19% in June

Nigeria’s inflation rate surged to a 28-year high of 34.19% in June, according to official data released on Monday.

It marks the 19th consecutive month of rising inflation, up from 33.95% in May.

Data from the National Bureau of Statistics showed that food and non-alcoholic beverages continued to be the largest contributors to inflation, with food inflation rising to 40.87% in June from 40.66% in May.

The significant rise in inflation comes a week before the Central Bank of Nigeria (CBN) is set to announce another interest rate decision, following three rate hikes earlier this year.

The inflationary pressures have been largely driven by policies implemented by President Bola Tinubu, including cuts to petrol and electricity subsidies and the devaluation of the naira currency twice in one year.

These reforms have significantly impacted the citizens, causing the worst cost-of-living crisis in decades.

Labour unions recently met with President Tinubu to advocate for a new minimum wage after suspending an indefinite strike last month.

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Analysts, however, suggest that inflation may have peaked as the effects of the recent devaluations start to decline.

Capital Economics, economic research consultancy, predicts that inflation will begin to decline from July, potentially dropping below 30% by the end of the year.

“…we think this marks the peak and inflation should start to decline. If right, that’s likely to lend more confidence to the CBN to declare the hiking cycle over and that interest rate cuts are a possibility soon,” the London-based firm said Monday.

At its last monetary policy meeting in May, the central bank increased its key lending rate by 150 basis points to 26.25%. The next rate decision is scheduled for July 23.