Nigeria has reported its highest annual inflation rate in nearly two decades, reaching 26.72% in September, as the country grapples with a deepening cost-of-living crisis. This concerning data was released by the National Bureau of Statistics (NBS) on Monday.
The situation has been steadily worsening, with the inflation rate surging for the ninth consecutive month from August’s 25.8%. The root of this crisis has been attributed to the economic reforms spearheaded by President Bola Tinubu, which have significantly impacted the lives of millions of Nigerians.
The bulk of Nigeria’s inflation basket, food inflation, also experienced a significant increase, reaching 30.64% in September, up from 29.34% in August.
One of the most contentious decisions made by President Tinubu was the elimination of a decades-old petrol subsidy, which led to a threefold increase in fuel prices and a depreciation of the naira by over 50%. These factors have contributed to surging prices in Nigeria, a country that is not only Africa’s largest oil producer but also the most populous.
The situation has put immense pressure on the country’s central bank, which faces an arduous task in combating inflation. David Omojomolo, an Africa economist at the research firm Capital Economics, stressed the urgency of the situation, saying, “The central bank has an unenviable inflation task and will need to respond with aggressive monetary tightening. Our expectation is that the inflation picture will continue to worsen. The impact of the removal of fuel subsidies will continue to push up on inflation while the naira’s devaluation will also continue to feed through.”
Nigeria has been struggling with double-digit inflation since 2016, eroding the incomes and savings of its citizens. This recent surge in inflation may prompt the central bank to consider raising interest rates, which are already at their highest level in nearly two decades. Annual inflation in Nigeria has now reached levels not seen since 2005.
