The lifting of import bans on various food items and suspending import duties on staple foods are expected to moderate inflation rate, Bismarck Rewane has said.
He agreed that headline inflation in Nigeria rose for the 17th consecutive month in May to 33.95 per cent, marking the longest run of increases in the country’s inflation rate, but argued that the recent reforms by the President Ahmed Tinubu administration could bring down inflation.
He strongly believes that Nigeria’s inflation could be at an inflection point.
“Higher food prices, which make up 50.7 per cent of the consumer price index, continued to drive inflation.
“However, recent government reforms, including lifting import bans on various food items and suspending import duties on staple foods, could help moderate price increases. These measures, combined with base effects, are expected to ease inflationary pressures in the second half of the year”, said Rewane, Managing Director of Financial Derivatives Company (FDC) Limited.
Nigeria’s inflation rate surged to 33.95 per cent in May 2024, up from 33.69 per cent in April 2024, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS) on Saturday.
This increase of 0.26 per cent points marks a steady rise in the cost of living, with year-on-year inflation rates jumping by 11.54 per cent -points from 22.41 per cent in May 2023.
However, the report highlights that while the month-on-month headline inflation rate in May 2024 was 2.14 per cent, it represented a slight decrease from April’s 2.29 per cent. This suggests a slower rate of price increase compared to the previous month.
In May 2024, Nigeria’s food inflation rate reached 40.66% on a year-on-year basis, a significant increase from the 24.82% recorded in May 2023. It is also higher than the 40.53% recorded in April 2024.
This sharp rise in food prices has been attributed to a range of factors affecting various food categories.
