Nigeria’s annual inflation rate has climbed to 22.79% in June, marking the sixth consecutive month of increase, according to a report by the country’s National Bureau of Statistics (NBS). The inflation rate had previously slowed to 21.3% in December but has been on the rise over the past six months.
Food Inflation Reaches 25.25%
In June, food inflation, which includes agricultural products, reached 25.25%, up from 24.82% in the previous month, as stated in the NBS report. The surge in food prices can be attributed to the higher costs of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetables, milk, cheese, and eggs.
Electricity Tariffs and Energy Prices Contribute to Overall Price Increase
The overall increase in prices can primarily be attributed to the recent hike in electricity tariffs and energy prices. The price of diesel oil used in heavy transport has risen to 800 to 850 Nigerian naira ($1.03-$1.09) per liter compared to NGN350 to NGN400 a year ago. Moreover, petrol prices have more than doubled following the removal of subsidies on petroleum products by the government. Prior to this change at the end of May, petrol was sold at NGN195 per liter, while it is now being sold at prices ranging from 480 to 550 Nigerian naira per liter.
Depreciation of Naira Leads to Higher Prices
Additionally, the decision by the Central Bank of Nigeria to allow a free float of the national currency against global currencies, resulting in the depreciation of the naira, has driven up prices of various goods. This depreciation, combined with the increase in petrol prices, has led to significant rises in the prices of essential items such as food, transportation, housing, medicines, and groceries. It has also impacted production costs in the manufacturing sector, subsequently affecting employment.
In conclusion, Nigeria’s inflation rate continued to rise in June, with food inflation also reaching a significant level. The increase in prices can predominantly be attributed to higher electricity tariffs, energy prices, and the removal of petroleum subsidies. The depreciation of the national currency has further contributed to the overall inflationary pressures in the country.