SAN FRANCISCO, September 15, (THEWILL) – Nigeria’s annual inflation rate rose to 13.22%t in August 2020 from 12.82% in the previous month, the National Bureau of Statistics said in a report published Tuesday.
It was the highest inflation rate since March 2018, as food prices increased to an over two-year high (16% against 15.48% in June) amid the coronavirus pandemic. Also, cost advanced further for housing & utilities (8.1% against 8%); transport (11.2% against 10.8%); furnishings & household equipment (10.2% against 10%); education (9.6% against 9.5%); and health (12.1% against 11.6%). On a monthly basis, consumer prices went up 1.3%, following a 1.2% gain in July.
Inflation has been above the central bank’s target range of 6% to 9% for more than five years and will probably continue accelerating due to a currency that’s under pressure and a recent order by President Muhammadu Buhari that restricts dollar access for all food and fertilizer imports.
Food prices have been a key driver of inflation in the nation of nearly 200 million people, and the index rose by 16% from a year earlier. Costs rose 1.7% in the month, the most since June 2017. Closure of Nigeria’s land borders that started in August 2019 and frequent clashes between herders and farmers weigh on supply and floods in the northern state of Kebbi have destroyed more than 25% of the rice harvest.
Sticky inflation and a need to support the naira will probably mean the central bank will hold its key interest rate at 12.5% next week. That’s even as the economy contracted by 6.1% in the second quarter, the most in at least a decade.