Anastasia John E, Abuja, Nigeria
A Central Bank of Nigeria (CBN) report has pinpointed key drivers behind the nation’s soaring inflation, revealing the significant impact of fuel costs, exchange rate fluctuations, and persistent insecurity. The report, based on the CBN’s inflation expectation survey, paints a concerning picture of the economic challenges facing Nigerians.
The survey highlights the overwhelming influence of energy-related expenses, with Premium Motor Spirit (PMS), diesel, and electricity costs contributing a staggering 91% to inflation experienced by businesses and 88% for households. Exchange rate volatility also plays a substantial role, impacting 89.4% of firms and 82.5% of households.
Transportation costs, encompassing road, air, and water travel, further exacerbate inflationary pressures, affecting 88.9% of businesses and 86.4% of households. The ongoing issue of insecurity, which continues to plague various parts of the country, adds another layer of complexity, impacting 83.8% of firms and 79.7% of households.
These findings come as Nigeria grapples with a stubbornly high inflation rate. The National Bureau of Statistics (NBS) reported that inflation climbed to 34.80% in December 2024, up from 33.60% in November, driven largely by a surge in food inflation to 39.84% year-on-year.
President Bola Tinubu has pledged to tackle inflation head-on in 2025, outlining plans to boost food production, promote local manufacturing, and increase access to credit. The government aims to slash inflation from its current level of 34.6% to 15% and is establishing the National Credit Guarantee Company to support these efforts.
While these initiatives offer hope, the impact of these policies on future inflation figures remains to be seen. The nation awaits upcoming economic data to gauge the effectiveness of the government’s response to these pressing economic challenges.
