As Nigeria’s headline inflation retreated for the second time in May, dropping from 18.12 per cent reported in April to 17.93 per cent, the realities in the markets in terms of food prices and consumer goods, continue to pose challenges to many Nigerians whose disposable incomes have weakened.
From a month on month perspective, inflation accelerated across all parameters, underscoring the fact that inflation remains a major challenge to investors and citizens. The new figure is contained in the Consumer Price Index (CPI), which measures changes in price levels over time, as released by the National Bureau of Statistics (NBS) yesterday.
Inflationary pressures have not abated since government announced a shutdown of Nigeria’s porous land borders in October 2019 in a move to spur mass production of food as well as curb smuggling. However, attacks on farms, forex scarcity and naira devaluation have contributed to seeing local food demand outweigh production, causing food prices to steadily rise.
According to members of the Organised Private Sector (OPS), inflation is perhaps the biggest poverty accelerator because of its weakening of purchasing power. “It weakens real income, erodes purchasing power, puts pressure on operating costs, aggravates production costs, reduces sales and negatively impacts profit margins across sectors,” the Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, said.
The position of LCCI was re-echoed by the World Bank in its Nigeria Development Update (NDU), noting that surging inflation is undermining the recovery of Nigeria’s economy, pushing at least seven million Nigerians into poverty and encouraging criminality as rising prices deplete already meager incomes.
Maintaining price stability is conducive to sustained social stability. We must take effective measures to maintain price stability and reduce inflation.