Recall that the West African country’s inflation rate had risen to 15.63% in December and left many stakeholders worried.
Business Insider Africa reported that the December uptick was driven by a significant increase in the prices of essential food items. It had also marked a departure from the previous rate declines recorded during the months leading up to December 2021.
Do note that January’s decline followed a similar drop in food inflation which stood at 17.13%, as against 17.37% in December.
In the meantime, analysts at Bloomberg are of the opinion that the rebound is a pointer that the Central Bank of Nigeria (CBN) will retain key [interest] rates when next its monetary policy committee members meet.
“While inflation has now exceeded the top of the central bank’s target band of 6% to 9% for almost seven years, it’s unlikely to persuade the monetary policy committee to increase the key interest rate when it meets next month. Since last year, Governor Godwin Emefiele has reiterated that the central bank will only make policy adjustments once the economy’s recovery is on a sustainable path,” said the report by Bloomberg.
As you may well know, inflation has to do with a continuous rise in the prices of goods and services. High inflation plagues a lot of countries in Africa including Nigeria. And it is a problem because not only does it erode the value of money over time, it also discourages long-term economic planning by creating uncertainty in an economy.