In Nigeria, the headline inflation rate has decreased for the second consecutive month due to a decline in food prices influenced by the harvest season.
According to data from the Nigerian Bureau of Statistics (NBS), the headline inflation rate for August was 32.15%, down from the 33.40% recorded in July. Food inflation also slowed to 37.52% from the previous month.
While the current inflation rate is still above the Central Bank of Nigeria’s target of 21%, the decrease might lead the Central Bank to maintain interest rates at their upcoming monetary policy committee meeting. The MPC had raised borrowing rates to about 26.25% in June.
Analysts anticipate that the recent fuel price hikes could impact inflation in the coming months. Following a 40% increase in fuel prices after a period of scarcity, the Nigerian National Petroleum Company (NNPC) acknowledged owing petrol suppliers.
Samuel Onyenkanmi, an analyst at Norreberger, noted, “Recent policy adjustments affecting fuel prices and the naira’s value may result in an upward trend in the inflation rate in the near future.”
The decrease in headline inflation in Nigeria brings some relief to the population grappling with high living costs. In August, there were protests demanding lower electricity tariffs and the restoration of fuel subsidies.
To address currency and inflation challenges in Nigeria, Dumebi Oyewole, Senior Economist at Stears, emphasized the importance of closer policy coordination between fiscal and monetary authorities.
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