Nigeria’s economic landscape is in disarray as annual inflation skyrocketed to an astonishing 26.72% in September, marking its highest level in nearly two decades.
This financial storm is intensifying the already formidable cost-of-living crisis in Africa’s most populous nation.
September marked the ninth consecutive month of rising inflation, with a substantial jump from August’s 25.8%, according to the National Bureau of Statistics (NBS).
These skyrocketing figures can be attributed to the consequences of President Bola Tinubu’s economic reforms, which have left millions of Nigerians struggling.
Food inflation, a significant component of Nigeria’s overall inflation, surged to 30.64% in September, up from 29.34% in August.
President Tinubu has been grappling with mounting pressure to alleviate economic hardships caused by the elimination of a long-standing petrol subsidy.
This decision tripled fuel prices and contributed to a more than 50% depreciation of the naira, leading to skyrocketing prices in the nation, which happens to be Africa’s largest oil producer.
Analysts have highlighted naira depreciation, rising food and energy prices, and increased logistical costs as primary drivers of Nigeria’s inflation crisis. They emphasize the need for the central bank to adopt an aggressive monetary tightening approach.
The removal of an eight-year restriction on 43 items, including rice, poultry, and cement, from accessing foreign exchange through the official window, has been among the central bank’s recent measures.
Governor Olayemi Cardoso, the new central bank governor, has also pledged to occasionally intervene in the foreign exchange market to boost liquidity.
Despite the challenging economic landscape and strong opposition from labour unions, President Tinubu remains steadfast in defending his policy reforms, vowing not to backtrack.
It looks like a tough road ahead for Nigeria as it grapples with soaring inflation and its economic implications, making it crucial for the central bank and policymakers to make strategic decisions to stabilise the economy and safeguard the well-being of the people.
Source: Reuters