The persevering with conflict in Ukraine is partly accountable for upward worth pressures on Nigeria, which depends on import of crucial meals supplies like wheat, from the Black Sea area.
Inflation in Nigeria maintained a “galloping pattern” in Might, rising above expectations to 17.7 p.c, in opposition to the 16.82 p.c recorded in April, knowledge launched by the state-backed Nationwide Bureau of Statistics has proven.
Issues about inflationary pressures pushed partly by conflict in Ukraine, in addition to home safety challenges pushed the Central Financial institution of Nigeria to tighten its benchmark rates of interest final month, for the primary time in nearly six years. The regulatory financial institution raised charges to 13 p.c from 11.5 p.c (a 150bps rise) throughout its coverage assembly final Might.
The financial coverage committee “feels that tightening would assist rein in inflation earlier than it assumes a galloping pattern, contemplating the progressive enhance in headline inflation”, financial institution governor Godwin Emefiele stated final month.
The persisting rise in inflation may “undermine” the delicate progress restoration in Nigeria “as a result of related build-up of uncertainties round the price of stock and different manufacturing inputs”, Emefiele stated.
Meals inflation rose to 19.5 p.c in Might, from 18.4 p.c in April, pushed by the price of bread and cereals and different meals objects, the NBS stated in its Client Worth Index report launched on Wednesday.
With the NBS report exhibiting growing inflation and because the naira continues to plummet in opposition to the greenback, the buying energy of Nigerians may very well be depleted much more.
The persevering with conflict in Ukraine has additionally been seen as partly accountable for inserting upward worth pressures on the nation of greater than 200 million people who depends on the import of crucial commodities in producing bread – a key driver of meals inflation in Nigeria.
“Inflation in Nigeria, already one of many highest on this planet earlier than the conflict in Ukraine, is more likely to enhance additional because of the rise in world gas and meals costs brought on by the conflict,” the World Financial institution stated in a latest report.
“And that, the World Financial institution estimates, is more likely to push a further a million Nigerians into poverty by the tip of 2022, on prime of the six million Nigerians that have been already predicted to fall into poverty this yr due to the rise in costs, notably meals costs.”