The annual inflation rate in Nigeria increased to 17.9 per cent in September, the highest in more than 11 years, from 15.5 per cent in February 2016, according to the National Bureau of Statistics (NBS).
It has maintained a steady rise in the past eight months from February, which is an indication of high profile economic crisis in the most populated country in Africa.
In August, it rose to 17.4 per cent, reflecting higher prices in consumable items, including electricity, kerosene, transport and food, with a separate index which rose to 16.6 per cent from 16.4 per cent in August, said the NBS at the weekend.
But The NBS has revised its forecast for year-end inflation, estimating the index will end at between 17.1 per cent and 18 per cent, up from 9 per cent at the start of the year.
Nigeria, Africa’s biggest energy producer, has seen its economy slide into recession for the first time in 25 years, largely due to the impact of low oil prices.
Crude oil sales account for 70 per cent of government revenue.
These problems have been exacerbated by a spate of militant attacks this year that have cut oil output causing dollar shortage on the currency markets that has frustrated businesses struggling to import raw materials for production.
On Friday the central bank auctioned two-month dollar forwards to clear a backlog of demands from airlines, manufacturers and other companies, traders said.
Minister of finance, Kemi Adeosun, has been having a running battle with the CBN Governor, Godwin Emefiele that both inflation and interest rates should be pruned down for the country to witness early recovery from recession.
However, the consensus among policy makers is that foreign and local loans should be sourced with which to fund the 2016 budget, having about $2.2 billion deficit.
They argue that if Nigeria could solve current scarcity of dollars hitting the economy, other factors, including high inflation and interest rates would ease off,
But apart from AfDB, which had agreed to help the country with $1 billon, no other international institutions has indicated zeal to do likewise without stringent conditionalities, that could worsen the hardship in the country.
By Emma Eke….
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