Key questions:
  • Nigeria’s inflation rate peaked at an 18-year high in October. What were the critical inflation-stoking factors? 
  • How can the CBN tame inflationary pressures in Nigeria?

In its latest report, the National Bureau of Statistics (NBS) disclosed that October 2023 saw a significant rise in headline inflation, reaching 27.33%. This marks a considerable increase of 6.24 percentage points from the 21.09% recorded in the same month last year. The uptick is primarily attributed to the prolonged impact of the petrol subsidy removal and exchange rate liberalisation policies that came into effect in the middle of this year. Between October 2022 and 2023, petrol prices have tripled while the naira's official rate has shed 47% of its value to trade at ₦825.5/$ from ₦439/$. 

Our range of inflation forecasts, which include projections up to the end of 2024, had predicted that Nigeria’s inflation would continue its ascent. This was based on our observation of enduring inflationary pressures despite a slight easing in month-on-month figures. M-o-M inflation has moderated for three consecutive months to 1.73% in October from