According to analysts at CardinalStone Finance, an
investment house, the rising inflation pressure indicates that Nigeria remains
within the top 10 countries with the highest inflation reading in Africa.
The analysts said that a material jump in prices of
foodstuff like rice, was a consequence of the increasing depletion of food
reserves and incessant insecurity issues in food-producing parts of the
country.
Nigeria’s inflation rate rose to 31.70 per cent in February
from 29.90 per cent in January.
This is according to recent data released by the National
Bureau of Statistics (NBS).
The NBS said that the February headline inflation rate
showed an increase of 1.80 per cent compared to the January headline inflation
rate.
It said that on a year-on-year basis, the headline inflation
rate was 9.79 per cent points higher than the rate recorded in February 2023,
which was 21.91 per cent.
“This shows that the headline inflation rate (year-on-year
basis) increased in the month of February 2024 when compared to the same month
in the preceding year ( February 2023),” the NBS said.
The International Monetary Fund (IMF) also warned that 8.0
per cent of Nigerians are at a high risk of food insecurity if the current
inflationary trajectory persists.
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi
Cardoso, said that the leading factors driving inflationary pressure in Nigeria
included the rising cost of energy.
Cardoso said that high fiscal deficits and lingering
security challenges in major food-producing areas were also responsible for the
high inflation rate.
He said that the apex bank had initiated a raft of
inflation-targeting frameworks in its monetary policy measures.
He said that this informed the decision by the CBN to
further raise the Monetary Policy Rate (MPR) by 400 basis points to 22.75 per
cent from 18.75 per cent.
According to Cardoso, the move followed the success recorded
in slowing down inflation in the past using the same mechanism.
Stakeholders, however, believe that the removal of the
petrol subsidy, closely followed by the decision to float the Naira was largely
responsible for the spiralling inflation.
According to Okechukwu Unegbu, a past president of the
Chattered Institute of Bankers of Nigeria (CIBN), President Bola Tinubu already
made some sensitive policy decisions even before appointing the CBN governor
and the finance minister.
A renowned economist, Prof. Ken Ife, said that the CBN
adopted inflation targeting as a basis for further tightening monetary policy
rates, an indication of how seriously the government took the country’s rising
inflation.
Ife, however, said that the support from the fiscal
authorities was crucial to achieving monetary policy results.
Dr Chijioke Ekechukwu, an economist, said that while many
countries were having their inflation rate reduced month-on-month, Nigeria’s
inflation rate continued to rise because of the volatile exchange rate regime.
Ekechukwu said that the standard of living had dropped to
the lowest ebb while the country’s external reserve was being eroded by
inflation.
“Cost of living has become increasingly unbearable, crime
has taken over the entire country, and investors are afraid to venture into the
country.
“Companies are shutting down and leaving the country and
jobs are lost every day.
He advised the Federal Government to ensure that the
country’s crude oil sales met the OPEC quota of 1.8 million barrels per day.
“The Federal Government should also ensure that revenue from
crude oil sales came in on a daily basis through the CBN, ” he said.
He said that such a step would provide the country with
enough liquidity to check inflation and other economic challenges.
NAN