How bad is Nigeria's inflation?

Nov 16, 2022|Michael Famoroti

Everyone has their story.

Eggs. International flight tickets. Paint.

Everyone has that product whose price increase they use to encapsulate Nigeria’s recent inflation. Although Nigeria’s history is, in the words of Friedrich Hayek, a history of inflation, recent price increases seem particularly excessive.

Key takeaways

  1. Nigerians have been reeling from double-digit inflation, with October 2022 inflation at 21.09%, the highest in seventeen years.

  2. However, the global inflation crisis also affects developed countries and regions like the US and Europe.

  3. In fact, data from the IMF suggests that price acceleration in developed nations is relatively worse than in third-world nations like Nigeria.

Border closures, a global pandemic, global supply chain disruptions, severe floods, and the Russian invasion of Ukraine have all contributed to unprecedented domestic and global inflation—or, the perception of it, at least.

How accurate is this perception, and just how bad is inflation in Nigeria?

Nigeria’s inflation is really bad…

At face value, the data is clear: Nigerians are experiencing historic inflation levels. Consumer Price Index (CPI) data from the National Bureau of Statistics (NBS) shows that Nigeria’s inflation was 21.09% in October 2022, meaning prices have risen by more than 20% since last October. That makes October inflation the highest in Nigeria for seventeen years (September 2005: 24.3%).

So far this year, Nigeria’s inflation has averaged 18.2% (2021: 17%), the highest since 1997. The only time inflation has been higher in Nigeria’s post-military era is in 2001, when inflation averaged 18.9%.

One thing to note here is that it doesn’t matter if you believe the NBS inflation estimates are wrong. All the CPI data analysed here (from 1997 till date) has been computed the same way, so we can safely compare inflation across time because even if the data is biased, the bias is the same over time. 

That said, it would

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