Even after increasing its monetary policy rate (interest rate), Nigeria’s inflation rate is now 20% higher than the World Bank’s prediction of 15.5%.
In its most recent report, ‘Nigeria Development Update (June 2022): The Persistence of Business as Usual,’ The global bank predicted that Nigeria’s inflation rate would be higher than expected, reaching 15.5 percent. The latest National Bureau of Statistics (NBS) inflation data, issued on Friday, indicated that the country’s inflation jumped to 18.60% in June, the most since January 2017, when it was 18.72%.
The NBS said, “In June 2022, the inflation rate increased to 18.60 percent on a year-on-year basis.” This is 0.84 percent higher compared to the rate recorded in June 2021, which was 17.75 percent.
“This means that the headline inflation rate increased in June 2022 when compared to the same month in the previous year (i.e., June 2021). Increases were recorded in all COICOP divisions that yielded the headline index.
“On a month-on-month basis, the headline inflation rate increased to 1.82 percent in June 2022. This is 0.03 percent higher than the rate recorded in May 2022 (1.78 percent).”
According to the data, urban inflation rose to 19.09 per cent and rural inflation hit 18.13 per cent in June 2022. This is despite the recent interest rate increase by the Central Bank of Nigeria (CBN).
In May, the CBN raised the nation’s interest rate from 11.5 per cent to 13 per cent in a bid to address inflation in the nation. The CBN Governor, Godwin Emefiele, disclosed that the Monetary Policy Committee had to increase the monetary policy rate by 150 basis points to prevent inflation.
He said, “Six members voted to raise the MPR by 150 basis points, four members’ by 100 basis points and one member, by 50 basis points.
“Members expressed deep concern about the continued uptrend of inflationary pressure despite the gradual improvement in output growth.
“Committee notes that the current rise in inflation is inimical to growth and the full recovery of the Nigerian economy.”
According to the World Bank, rising inflation will push millions of Nigerians into poverty in 2022.