Inflation hits highest point since Obasanjo era

The consumer price index (CPI) measuring inflation in the Nigerian economy rose to its highest point since former President Olusegun Obasanjo’s days as the first citizen of Nigeria.

The inflation report released by the National Bureau of Statistics (NBS) shows that inflation for the month of June spiked to its highest point since October 2005 — 11 years.

Inflation rose from 15.6 percent in May 2016 to 16.5 percent in June 2016, as energy and food prices weigh in heavy on inflation for the month.

“In June, the Consumer Price Index (CPI) which measures inflation continued to record relatively strong increases for the fifth consecutive month. The Headline index increased by 16.5% (year-on-year), 0.9% points higher from rates recorded in May (15.6%),” NBS said.

“Most COICOP divisions which contribute to the headline index increased at a faster pace, the increase was however weighed upon by a slower increase in three divisions; Recreation & Culture, Restaurant & Hotels, and Miscellaneous Goods & Services Year on year, energy prices, imported items and related products continue to be persistent drivers of the core sub-index.

“The Core index increased by 16.2% in June, up by approximately 1.2% points from rates recorded in May (15.1%). During the month, the highest increases were seen in the electricity, liquid Fuel (kerosene), furniture and furnishings, passenger transport by road, fuels and lubricants for personal transport equipment.”

Asides farm produce, the core sub-index increased by 16.2% in June (year-on-year), up approximately by 1.2% points from 15.1% recorded in May.

“The Core sub-index has increased at a faster pace for five consecutive months. Over the first six months of the year, the Core subindex increased by 12.8%, up 5.2% points from rates recorded in the corresponding period in 2015.”

Inflation has increased consistently since October 2015, with the change in exchange rate policy, in the latter part of June expected to weigh in on inflation for the month of July.

Goldman Sachs, an American multinational banking and investment firm, forecasts that Nigeria’s inflation will not rise above 20 percent in 2016, before it takes retreats to lower levels.