Headline inflation rate rose to 22.04% in March, a 0.13% increase from the 21.91% rate recorded in February, according to the latest report published by the Nigerian Bureau of Statistics (NBS) on Friday.
The report said the increase was buoyed by the jump in prices of food, housing, fuel and gas, among others. The figure shows a consistent increase in inflation rate for the last two years.
“On a year-on-year basis, the headline inflation rate was 6.13% points higher compared to the rate recorded in March 2022 which was 15.92%.
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“This shows that the headline inflation rate (year-on-year basis) increased in March 2023 when compared to the same month in the preceding year (i.e., March 2022),” the report said.
Food and non-alcoholic beverages top the list of items whose prices were increased by 11.42%, followed by housing, water, electricity and gas, which saw 3.6% price lift.
“The contributions of items on the divisional level to the increase in the headline index are food & non-alcoholic beverages (11.42%); housing, water, electricity, gas & other fuel (3.69%); clothing & footwear (1.69%); transport (1.43%); furnishings, household equipment & maintenance (1.11%); education (0.87%); health (0.66%); miscellaneous goods & services (0.37%); restaurant & hotels (0.27%); alcoholic beverage, tobacco & kola (0.24%); recreation & culture (0.15%) and communication (0.15%),” the NBS said.
While the Nigerian economy has been on downward spiral due to plummeting oil revenue, experts have attributed the rising inflation to some monetary policies of the Central Bank of Nigeria. Late last year, in a bid to curtail moneybagg politics, terrorism financing and money laundering among other ills, the CBN introduced the naira redesign policy.
The idea was to mop up excess cash outside banks’ vaults (which was believed to be partly responsible for rising inflation), and release newly redesigned naira notes in minimal quantities with hope it would help tame inflation. However, weeks after its introduction, the policy came back with a different result.
The Nigerian economy, particularly the informal sector, was greeted with severe cash crunch that nearly grounded it to a halt. With businesses reeling on the mercy of the naira redesign policy, the economy took a further downturn. Experts believe the implication is partly responsible for the rising inflation rates.
But generally, the economy has been in shambles since 2015, due to economic policies introduced by President Muhammadu Buhari’s administration. The inflation rate accelerated following the decision of the federal government to close Nigerian land borders in August 2019, and ban the importation of selected food items, including rice.
Efforts by the CBN, including raising interest rate to 18%, to tame inflation have failed to yield the needed result.