Nigeria’s inflation rate continued its upward trend for the sixth consecutive month, reaching a staggering 22.79% in June 2023, according to data released by the National Bureau of Statistics. This represents a new 17-year high, surpassing the previous month’s rate of 22.41%.
The report highlights that the surge in inflation was driven primarily by the cost of food and non-alcoholic beverages, which increased by 11.81%. Economists have expressed concern over the need for a comprehensive approach to address inflation, emphasizing the importance of tackling factors that drive up production costs and impact the agricultural sector.
Prof Segun Ajibola, a former President and Chairman of Council at the Institute of Chartered Institute of Bankers of Nigeria, stressed the need for holistic measures to curb inflation. He believes that strategic policies and expertise, along with efforts to control production costs, will contribute to improving the situation.
Dr Yemi Kale, Partner and Chief Economist at KPMG Nigeria, pointed out that the removal of fuel subsidies could lead to a significant increase in the inflation rate, potentially reaching 30% in June 2023. He noted that this removal would cause disruptions, resulting in higher energy prices, inflation, and transportation fares, which in turn would impact food prices, consumer demand, and overall economic stability.
The National Bureau of Statistics acknowledged that the full impact of fuel subsidy removal and exchange rate unification had not yet been fully reflected in the June inflation data. The effects of these policies on consumer prices would become more evident in the coming months based on actual market prices collected across the country.
As Nigeria grapples with high inflation rates, economists emphasize the importance of comprehensive and strategic measures to address the underlying issues and mitigate the impact on the economy and people’s livelihoods.
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