The significant increase in Nigeria’s headline inflation to 24.08% in July 2023, as reported by the National Bureau of Statistics, could have various economic implications and might impact the country’s monetary and fiscal policies.
This marks the most substantial surge observed in 2023 so far. In the previous month, inflation stood at 22.79%, but it has now risen by 1.29 percentage points.
This is contained in NBS Consumer Price Index (CPI) report released on Tuesday.
The CPI measures the rate of change in prices of goods and services.
The NBS said, “In July 2023, the headline inflation rate rose to 24.08 per cent relative to June 2023 headline inflation rate which was 22.79 per cent.
“Looking at the movement, the July 2023 headline inflation rate showed an increase of 1.29 per cent points when compared to June 2023 headline inflation rate.
“On a year-on-year basis, the headline inflation rate was 4.44 per cent points higher compared to the rate recorded in July 2022, which was 19.64 per cent. This shows that the headline inflation rate (year-on-year basis) increased in July 2023 when compared to the same month in the preceding year (i.e., July 2022).”
Amidst escalating food prices and the removal of subsidy on Premium Motor Spirit (petrol), the Central Bank of Nigeria (CBN) elevated the Monetary Policy Rate (MPR), an indicator of interest rates, from 18.5% to 18.75% on July 25, 2023.
The Central Bank stated that the increase in the interest rate has played a significant role in mitigating the inflation rate.
In response to the forex scarcity issue, with the dollar reaching a value of more than N900 against the naira, Acting CBN Governor, Folashodun Shonubi, announced on Monday that the apex bank will implement specific measures in the coming days to enhance liquidity within the market.