The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has expressed concerns on the persisting uptick in inflationary pressure for the seventeenth consecutive month, with headline year-on-year inflation moving further to 16.47% in January from 15.75 per cent in December 2020.
According to the report, Nigeria’s headline inflation has risen to its highest in over three years while food inflation rose to its highest since July 2008, when it stood at 20.9%
In a report obtained from the CBN, the MPC the surge in inflation rate has continued since the government closed the land border, affecting movement of goods across neighbouring markets, and has affected cost of living in Nigeria, dragging more Nigerians behind the poverty line.
MPC also blamed deregulation of the downstream sector of the oil industry, which erased the intervention of the government through subsidy to temper the price at fuel stations. This was disclosed in the MPC report released on Friday, and obtained from the CBN.
“This uptick was attributed to the increase in both the food and core components of inflation, which rose to 19.56 and 11.37 per cent in December 2020, respectively, from 18.30 and 11.01 per cent in November 2020.
“This continued upsurge in food inflation was attributed to the logistical bottlenecks, spurred by the increasing security challenges in many parts of the country, which disrupted food production and supply to the market.
“Other factors driving the core inflation, include the recent deregulation of the downstream sector of the oil industry, which led to hikes in the price of Premium Motor Spirit (PMS) and the upward adjustment in electricity tariff.”
The policy committee assured that stimulus packages from the CBN and the government will curb rising inflation, “The Committee, however, noted that as output rebounds, supported by the suites of stimulus packages by both the Federal Government and the Central Bank, inflationary pressure would likely begin to moderate in the near term.”
Companies have reflected the rising cost of fuel and electricity on their goods and services, while transportation fare has also gone. These factors have reduced the purchasing power of Nigerians, with a unit of egg, which was sold at N30 in fourth quarter last year, is now sold between N50 and N60 – other household items have also skyrocketed.