Inflation rose to a near four-year high of 12.8 per cent in March. It was 11.4 per cent in February. The new spike in inflation figure was driven by a rise in food prices, the National Bureau of Statistics (NBS) has said.
The economy is facing its worst crisis in decades, fuelled by the collapse in crude prices, which has slashed government revenues, weakened the currency and caused growth to slow. The economy grew 2.8 per cent last year, its slowest pace in decades.
Food prices, which account for the bulk of the inflation basket, rose by 1.4 per cent, the NBS said on its website. “The higher price level was reflected in faster increases across all divisions,” the bureau said in a report.
The NBS expects inflation to end the year at 10.16 per cent, above the central bank’s target upper limit of nine per cent. The price index ended at 9.55 per cent last year.
March rate is 3.8 per cent above the Central Bank of Nigeria (CBN) ceiling of nine per cent and it confounds the Monetary Policy Committee (MPC) by posing a major policy trilemma of a weak exchange rate, runaway inflation and high interest rates.
A breakdown of the inflation report shows that the food basket increased by 1.4 per cent to 12.7 per cent while the core inflation, which is price level deseasonalized for volatile agricultural produce, increased by 1.1 per cent to 12.2 per cent in March.
The food basket was a victim of higher transportation and logistics costs. The highest price increases were in fish, vegetables, bread and cereals. The core index jumped significantly due to higher electricity tariffs and fuel shortages.