Nigeria’s Headline Inflation Rate Remained High in May 2023 climbing by 0.19%

Through a series of modest increases in the monetary policy rate to 18.5%, the Central Bank of Nigeria has repeatedly tried to control the inflationary spike. In May 2023, the inflation rate is still significantly high. The National Bureau of Statistics said that, from May 2023 to May 2023, the monthly inflation rate climbed by 0.19 percent, from 22.22% to 22.41 percent.

In addition, the headline inflation rate was 4.70 percent higher annually than the inflation rate in May 2022, which was 17.71 percent. With an 11.61 percent (Y-O-Y) share of the inflation equation, food and non-alcoholic beverages continue to be the biggest contributors. Inflation is also influenced by housing, water, electricity, gas, and fuel (3.75%), clothing and footwear (1.71%), and transportation (1.46%).

In comparison to April 2023 (1.91 percent), the headline inflation rate in May 2023 (1.94 percent) was 0.03 percent higher on a monthly basis. The persistent rise in the inflation rate may have a greater impact on households than on businesses because it is easy for businesses to pass along the rise in production costs to customers as higher pricing. Despite being a good thing, the recent elimination of the PMS subsidy may make inflation worse as seen by the skyrocketing prices of food and rent.

In order to increase local food production, improve security, and quickly put cushioning mechanisms in place to mitigate the immediate consequences of subsidy elimination, the current administration must develop a comprehensive approach to battle inflation.