Nigeria’s annual inflation reaches 24.08%, the highest in almost two decades, driven by President Tinubu’s ongoing reforms.
Removal of fuel subsidies and currency rate unification contributed to a 40% naira depreciation and quadrupled gasoline prices, reflecting in food inflation at 26.98% in July 2023.
President Tinubu emphasizes maintaining the current pricing structure for petroleum products, focusing on efficient responses to industry inefficiencies amid deregulation commitment.
As President Bola Tinubu’s reforms continue to take hold, Nigeria’s annual inflation rate increased to its highest level in almost two decades in July at 24.08% compared to 22.79% in June, deepening a cost-of-living issue in Africa’s largest economy.
Since 2016, Nigeria’s inflation rate has been in the double digits, eroding income and savings and forcing the central bank to raise interest rates to their highest level in almost two decades. This is supported by the National Bureau of Statistics’ (NBS) most recent publication of the Consumer Price Index (CPI) data for July 2023.
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In the biggest measures seen in years, Tinubu lifted limits on foreign exchange trading, which has depreciated the naira by more than 40%, and abolished a popular but expensive gasoline subsidy, prompting prices to quadruple. The Food inflation rate rose to 26.98% in July 2023, representing a 1.73% point increase from 25.25% recorded in the previous month and 4.97% points higher than 22.02% recorded in the corresponding period of 2022.
“The rise in food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetable, milk, cheese, and eggs,” the statistics agency notes.
The NBS made it clear last month that the consequences of the elimination of fuel subsidies and the unification of the currency rate might not be fully reflected in the June inflation statistics.
This was done in response to concerns raised by analysts and the Nigerian public that the country’s inflation numbers might not be giving a full picture of the situation. However, the figures are now showing an increase consistent with the known economic trends. The sharp increase in food, energy, and transportation costs is proof of this.
Meanwhile, the presidency has formally said that there will not be a price hike for petroleum products at this time, while talks of the reintroduction of a partial fuel subsidy have been floating around. However, based on the information and studies now at his disposal, President Bola Tinubu is sure that Nigeria can maintain its current pricing structure.
The emphasis of this decision is on quick and effective responses to any inefficiencies in the midstream and downstream sectors of the petroleum industry, which supports the continued commitment to the deregulation program.
