Nigeria’s inflation rate increased by 13.71% (year-on-year) in September 2020. This is 0.49% higher than the rate recorded in August 2020 (13.22%).
The price of food items in Nigeria continues to increase. According to Nigeria’s statistics office, the composite food index rose by 16.66% in September 2020 compared to 16% in August 2020.
This rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits and oils and fats.
Africa’s most populous nation’s inflation rate is still higher than the Central Bank’s target range of 6% to 9%. While addressing the media after the Central Bank’s monetary policy committee last meeting, CBN Governor Godwin Emefiele said the major drivers of inflation are disruption to global and domestic supply chains as a result of COVID-19 pandemic, increase in Value Added Tax (VAT), exchange rate adjustment, and seasonal food supply shocks due to the onset of the farming season and other structural bottlenecks.
Last month, Nigeria’s central bank decided to cut lending rate by 100 basis points from 12.5% to 11.5%, in order to boost lending and spur growth in the economy which has been battered by lower oil prices foreign exchange shortages and the global pandemic. The next CBN MPC meeting is scheduled to hold on November 23 to 24.