Nigerian inflation quickened for a 14th straight month in October on rising food prices caused by border closures, dollar restrictions and banditry attacks that are preventing farmers from producing food.
Consumer prices rose 14.2% from a year earlier, compared with 13.7% in September, Abuja-based National Bureau of Statistics said Tuesday in a report published on its website. The median estimate of five economists surveyed by Bloomberg was 14.1%. Costs rose 1.54% in the month.
Key Insights
This is the fifth year inflation has exceeded the central bank’s target range of 6% to 9% and will probably continue accelerating due to an end of fuel subsidies, currency weakness, typical price hikes related to the festive season and a recent order by President Muhammadu Buhari that restricts dollar access for food and fertilizer imports. That will drive traders to the parallel market for foreign exchange, where they will pay a lot more.
Food prices have been a key driver of inflation in Africa’s largest economy. The food index, which accounts for more than half the inflation basket, rose 17.4%, compared with 16.66% in September. Floods, violent farm attacks, and clashes between herders and farmers weigh on supply, though the government’s softening stance on border closures in place since August 2019 may reduce pressures.
An unexpected cut in the key interest rate by 100 basis points in September will probably mean the central bank will hold the rate at 11.5% next week as it seeks to support a recovery in Africa’s largest economy, even as inflation remains sticky.
– Bloomberg