By John Ikani
The inflation rate in Nigeria increased to 22.04% in March 2023, according to the latest report by the National Bureau of Statistics (NBS).
This is higher than the 21.91% recorded in February 2023.
It would be recalled that the inflation rate for March 2022 was 15.92%, a development that prompted the Central Bank of Nigeria (CBN) to begin monetary policy tightening.
The latest inflation rate is the 9th highest since 2005 and the 21st since January 1996.
It’s also the highest since 2009 when the current consumer price index basket was adopted.
The continuous rise in inflation puts pressure on the central bank’s monetary policy strategy, which has relied on increasing policy rates and limiting physical cash in circulation to combat inflation.
Core inflation, which excludes volatile food inflation, was recorded at 19.86%, the highest ever for this CPI basket.
The highest increases were seen in gas prices, air transport, liquid fuel, personal transport equipment, and medical services.
Volatile food inflation rose slightly to 24.45% for March 2023, higher than February 2023.
The rise in food inflation on a year-on-year basis was caused by increases in the prices of oil and fat, bread and cereals, potatoes, yam and other tubers, fish, fruits, meat, vegetables, and spirits.
Contributions to the increase in the headline index were from food and non-alcoholic beverages, housing, water, electricity, gas, and other fuel, clothing, footwear, transport, furnishings, household equipment, maintenance, education, health, miscellaneous goods and services, restaurant and hotels, alcoholic beverage, tobacco and kola, recreation and culture, and communication.
Despite the central bank’s monetary policy tightening, inflation continues to rise.
The bank increased its benchmark monetary policy rate to 18% in February.
The continuous rise in inflation suggests that key structural challenges remain in the Nigerian economy, particularly in areas like food and non-alcoholic beverages, housing, water, electricity, and petrol.
With inflation now at 22.04%, the central bank is likely to continue tightening monetary policy, focusing on reducing money supply.
