According to the International Monetary Fund (IMF), Nigeria’s Consumer Price Index (CPI) is expected to reach 16.1% in 2022.
This forecast was included in the IMF’s Regional Economic Outlook for Sub-Saharan Africa, produced last week and published on its website.
The forecasted 16.1% will be the highest level in the country since October 2021, when it was 16.63%.
According to the National Bureau of Statistics (NBS), Nigeria’s CPI climbed to 15.92 percent in March.
This is the highest inflation rate the country has seen since October 2021, when it hit 15.99 percent.
Nigeria is not immune to the global price surge, as seen by March’s increase in the inflation rate.
On the other hand, the IMF predicted that inflation would fall to 13.1% by 2023.
The IMF cautioned about the implications of inflation in its World Economic Outlook report.
The report read in part, “In sub-Saharan Africa, food prices are also the most important transmission channel, although in slightly different ways. Wheat is a less important part of the diet, but food, in general, is a larger share of consumption.
“Higher food prices will hurt consumers’ purchasing power, particularly among low-income households, and weigh on domestic demand. Social and political turmoil, most notably in West Africa, also weighs on the outlook.”
In response to the Global Study on Food Crises, the Washington-based bank stated this in its current Commodity Markets Outlook report.
According to the bank, rising food costs have exacerbated food insecurity in emerging markets and developing economies, particularly due to reliance on Ukraine and Russia for food imports.
It went on to say that the pandemic had generated food insecurity all around the world before the conflict in Ukraine.
According to the report, more individuals are expected to be food insecure due to war-related interruptions in the food trade, higher food price inflation, and higher costs of managing food assistance operations.
Apart from the pandemic and the ongoing war in Ukraine, the World Bank stated in a separate report that import limitations and the Central Bank of Nigeria’s non-flexible currency rate management were the main drivers of food inflation in Nigeria.
“Rising food costs are the fundamental driver behind the spike in headline inflation in Nigeria,” the paper stated. Import restrictions and a rigid exchange rate management have caused food costs to rise.
“The current regime is keeping the official exchange rate of the naira artificially strong while the naira has weakened significantly on the parallel market. Additionally, the central bank has restricted importers’ access to foreign currency for 45 products and has reduced the supply to other importers.”