Nigeria’s Inflation Reaches 18-Year High of 24.08% in July 2023.
The latest inflation data, released on Tuesday, reveals that Nigeria’s annual inflation rate has reached an 18-year high of 24.08% in July 2023. This marks the seventh consecutive month of increasing inflation, according to the National Bureau of Statistics (NBS) report.
In comparison to the previous month’s rate of 22.79%, the inflation rate surged to 24.08% in July 2023. Additionally, the rate of food inflation saw a rapid acceleration, climbing from 25.25% in the previous month to 26.98% in July.
The NBS report highlights, “Examining the movement, the July 2023 headline inflation rate exhibited a rise of 1.29 percentage points compared to the June 2023 headline inflation rate.”
Analysts had predicted that the removal of subsidies and the devaluation of the naira would lead to even higher inflation rates in July. The Financial Derivatives Company Limited, led by economist Bismarck Rewane, noted in an economic bulletin that recent policy changes are now more visibly impacting inflation. The bulletin emphasized that petrol prices surged twice in one month, from N488 per litre to N617 per litre, and diesel prices also rose by 5.88%, reaching N720 per litre. The naira hit a historic low of N893/$ on the parallel market.
Analysts from Capital Economics underscored that the elimination of fuel subsidies would amplify inflation beyond their initial projections. They stated, “We maintain our view that the fuel subsidy removal will contribute around 4.5 percentage points to headline inflation. The ripple effects of the naira’s decline will continue to manifest as well.”
