National Bureau of Statistics says ever-increasing inflation rate is caused primarily by the substantial depreciation of the naira

Nigeria’s annual inflation rate continued to accelerate in December, hitting a nearly 30-year high of 28.9%, up from 28.2% in November

According to the National Bureau of Statistics, headline inflation has consistently exceeded the upper boundary of the central bank’s target range of 6% to 9% since 2015, primarily due to the substantial depreciation of the naira.

In its report for December, which was released in Abuja on Monday, January 15, the bureau said the depreciation had gained momentum following the new government’s decision to eliminate petrol subsidies from July 1, coupled with the liberalisation of foreign exchange in June 2023.

Prices of food, which is the most relevant in the consumer price index (CPI) basket, jumped to 33.9% in December, the highest since August 2005, from 32.8% in November.

The bureau said the annual core inflation rate, which excludes farm produce, quickened to a multi-year high of 23.07% in December, from 22.55% in November.

On a monthly basis, consumer prices advanced by 2.3% in December, following a 2.1% rise in the previous month.

The rate at which inflation rises has a major impact on the livelihoods of the country’s citizens. Even before the fuel subsidy was removed, consumers said they were deeply concerned about constant increases in the prices of commodities and services.

Babagana Abatcha, an economics lecturer at Ramat Polytechnic in Maiduguri, said: “The main reason behind the high inflation rate is the depreciating Nigerian currency. Inflation was already high when President Bola Tinubu took office at the end of May last year. But it began to soar to new heights when he announced the removal of the fuel subsidy, which came into effect on July 1.

“The country imports 90% of the commodities it needs, so the exchange rate, which keeps depreciating, plays a key role in the cost of items.

“This is putting huge strain on consumers, whose livelihoods are at stake. The unemployment rate is high in Borno State but, even for those who have work and earn salaries, their income cannot keep pace with the exorbitant price hikes of all commodities.

“The price of all food is becoming out of reach for a number of poor and indigent Nigerians, particularly internally displaced persons who are struggling to provide one meal a day for their families. Many go to bed with empty bellies.

“Insecurity, mainly in the rural local government areas, has increased lately and that has had a drastic effect on farming and the production of food which has fallen exponentially. This has contributed to the increase in prices.

“The only way the inflation rate can be addressed is if insecurity in the state is properly addressed.”

Hajjiya YaKime, from Maiduguri, said: “Nowadays we buy only the necessities, such as food. We no longer spend lavishly.

“Two or three years ago, when prices started increasing, we complained about the rising price of commodities. We did not know at that time that it would get a lot worse. We thought that the prices would begin to decrease after a while.

“But recently, insecurity has increased and fewer farmers can work their lands because of insurgent attacks and kidnapping. This has contributed to food prices soaring to sky-high levels. Now we buy only the basics and even that is a struggle.”

Musa Lawan, a civil servant, told RNI that government salaries were not sufficient, but that no one could do anything about it.

“It does not matter how much we earn, we still cannot satisfy our needs. We buy what we can and that boils down to essential items only now.

“We can no longer buy food in bulk. We just do what we can with the little money we have. The economy isn’t smiling at anyone, these days.

“Years back, we could buy at least twice or even three times as much on my monthly salary. But, these days, every time you go to the market the price of food and other commodities is different. And each time they have increased. In 24 hours the prices can change and the cost will be higher.”

AYSHA MUSTAPHA KOLOMI