Inflation has hit its highest level in the month of August, the highest in 18 years in Nigeria, says a report by the Financial Derivatives Company (FDC), a leading independent economic and finance research firm.
According to FDC, headline inflation may rise to 25.47 per cent, with rising costs of foodstuffs, energy logistics and other living items leading the upward rise and further eroding the purchasing power of average Nigerians.
Some economic and financial firms also indicated that inflation may continue unabated for the eighth consecutive month, reaching the highest point since August 2005.
Warning that the upward trend may rise by more than 100 basis points to above 25 per cent, FDC stated: “The contributory factors to inflation in Nigeria remain basically the same.
“Prominent among these factors are Naira depreciation, higher logistics costs, money supply growth, and cost-push variables,” the report added.
FDC, however, noted that rising inflation was not peculiar to Nigeria as some of the sub-Saharan African countries also recorded higher inflation rates, owing primarily to currency weakness and increasing energy costs.
Nigeria’s inflation crisis, meanwhile was attributed to closure of borders, which limited the supply of certain goods, insecurity in the food-producing regions of the country, devaluation of the Naira, imported inflation, high fuel pump prices and the increase in electricity tariffs.
On its part, the Bola Ahmed Tinubu-led Federal Government has said it was in the process of removing all other major macroeconomic impediments to the stability of the foreign exchange rate, inflation, interest rates, liquidity and access to adequate finance.
The government stated that it was putting finishing touches on its monetary and fiscal reforms to free up the macroeconomic environment to enhance Nigeria’s disposition to global destination for foreign investors. Read more.
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