Inflation rates may rise in Nigeria amid fuel scarcity & insecurity

Inflation rates may rise in Nigeria amid fuel scarcity & insecurity

The inflation rate of Nigeria, Africa’s most populated country, rose to around 16.8% in April, impelled by increased fuel prices and budding costs for food, including cereals and bread, suggests new data issued from Nigeria's NBS (National Bureau of Statistics).

The annual food inflation rate rose from 17.2% to 18.4% in March, making the headline rate to 16.8%, the highest in the last 8 months, says the data released recently.

Analysts claim the rise in food and fuel costs has been driven by disruptions in global supply following Russia's invasion of Ukraine.

The prices for wheat and flour, the most important ingredient in cereals, bread and pasta, have jumped by more than 5% over the weekend and around 68% year-on-year.

The shortage of jet fuel has resulted in increasing fare prices by almost 100% or, in some cases canceling the flights or suspending the operation, as the prices of the commodity have jumped from 190 to 700 naira ($0.46 to $1.69) per liter due to Russia's invasion of Ukraine.

Ikemesit Effiong, analyst and research head of SBM Intelligence said that this inflation hike implies that the purchasing power index (PPI) of Nigerian consumers who survive with a minimum wage of 18,000 nairas ($43.35) per month is being battered.

Nigeria at present is not only handling the rising inflation, said Effiong. When coupled with low growth in both public and private domain and high level of unemployment, the largest economy in Africa is suffering from an enlarged time of stagflation.

He added further that the budding insecurity across various parts of Nigeria and the moderated ramp-up of election spending could also result in prices remaining high for the rest of the year.

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