The National Bureau of Statistics (NBS) disclosed on Monday that Nigeria’s inflation rate had risen to 15.36 per cent in December 2021.
Earlier data from the NBS showed that headline inflation had maintained a decline for a period of eight months, from April to November 2021.
However, It was broken in December when the inflation climbed by 0.23 points to 16.63 per cent, from 15.50 per cent recorded in November.
The Statistician General of the Federation, Simon Harry, on Monday during a press briefing in Abuja said, “However, it may interest you to note that this trend has been broken by the slight change in the month of December, 2021 as the inflation rate for all items (Headline Inflation) for the month increased to 15.63 per cent, year-on-year.
“This trend clearly shows an increase from 15.40 per cent recorded in the month of November, 2021 to 15.63 per cent in December, 2021. This is 0.23 per cent points higher than the rate recorded in November 2021.”
He, however, said the development was a decline when compared against the corresponding month in 2020, which recorded 15.75 per cent.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had disclosed this during her presentation of this year’s approved budget recently.
She said, “Inflation is projected to be double-digit in the medium-term given structural issues impacting the cost of doing business, including high food distribution cost.
“However, the current steady decline is expected to be sustained, seeing the inflation rate drop to 13 per cent in 2022 and 10 per cent by 2024.”
The World Bank had earlier stated that Nigeria might have one of the highest inflation rates globally in 2022, with increasing prices diminishing the welfare of Nigerian households.
According to the World Bank, Nigeria is also projected to have the seventh-highest inflation rate among Sub-Saharan African countries in 2022.
Reacting to the latest inflation figure, an economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said high inflationary pressures had been a major concern.
He said, “Although the economy witnessed an incremental deceleration in inflation over the past eight months before the reversal in December, high inflationary pressures remain a major concern to stakeholders in the Nigeria economy.”
According to him, the possible reasons for the increase in inflation rate are: surge in consumer spending driven by the December festivities, exchange rate depreciation, liquidity challenges in the forex market impacting adversely on manufacturing output, security concerns affecting agricultural output, high transportation costs, high energy cost, high import duty on intermediate goods and raw materials, among others.
On how the Federal Government could tackle the inflationary pressures, Yusuf said “To tame the current inflationary pressure, the government needs to fix the following: reform the foreign exchange market to stabilise the exchange rate and reduce volatility; address forex liquidity issues through appropriate policy measures; address the security concerns causing disruption to agricultural activities; address productivity issues in the real sector of the economy.”
He also included that the government needs to “address the challenge of high transportation cost; reduce fiscal deficit financing by the CBN to minimise the incidence of high-powered money in the economy; manage climate change consequences to reduce flooding and desertification; ensure the restoration of normalcy and good order at the nation’s ports to reduce transaction costs; reduce import duty on intermediate products and raw materials for industries to reduce production costs, especially in the light of the sharp depreciation in the exchange rate.”
He further pleaded with the government to address major concerns around high energy cost, and create an investment-friendly tax environment.
