Economy

Nigeria Inflation Accelerated in August Ahead of Interest Rate Decision

Nigeria Inflation Accelerated in August Ahead of Interest Rate Decision
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By MacDonald Dzerotoi

LAGOS (Reuters) – Nigeria’s inflation rose for the seventh consecutive month to 20.52 percent in August ahead of the central bank’s interest rate decision next week, the statistics office said on Thursday.

The central bank meets on Tuesday to decide on interest rates in Africa’s largest economy. It has previously said it will continue to raise interest rates if inflation remains high.

Refinitiv data showed that annual inflation in Nigeria remained at its highest level since September 2005. On a monthly basis, the consumer price index rose 1.77% in August, compared to 1.82% in July, the National Bureau of Statistics said.

Food price inflation accelerated to 23.12% from 22.02% in the previous month as Nigerians continued to face higher prices for basic commodities such as rice and bread.

The price of diesel has risen this year due to the rise in global oil prices, which has led to higher electricity costs for citizens, while the weak naira currency in the parallel market has made some imports expensive.

Double-digit inflation has been in Nigeria since 2016, driven in part by a weak naira.

“In Nigeria, inflation is fueled by several factors but the main ones are exchange rate pressure and the diesel price,” the derivatives firm said in a note to investors.

Nigerians head to the polls in February to choose President Muhammadu Buhari’s successor, with soaring inflation and the state of the economy seen as major issues for voters.

Policy makers in Nigeria assert that persistent inflationary pressures are largely structural and imported.

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