The inflation rate in Nigeria has surged 24 times over the last 25 months, according to an analysis of the Commodity Price Index reports published by the National Bureau of Statistics. The analysis revealed that between October 2021 and October 2023, Nigeria’s inflation increased 24 times, with a singular exception in December 2022 when it slowed to 21.34 percent from the 21.47 percent recorded in November 2022.
During the period under review (Oct 2021 – Sep 2023), inflation has risen from 15.99 percent to 27.33 percent. Inflation, as defined by Investopedia, is a rise in prices, indicating a decline in purchasing power over time. It reflects the average price increase of a basket of selected goods and services over a specified period.
The continuous increase in prices, expressed as a percentage, signifies that a unit of currency effectively purchases less than it did in previous periods. This translates to a significant impact on consumers, as illustrated by the example of a constant monthly salary facing escalating costs of goods.
For instance, two years ago, a monthly salary of N100,000 with monthly expenses of N50,000 reflected a 50 percent spending ratio. Fast-forward to 2023, where prices are at a record high, and the same salary will now be insufficient to cover the same expenses, affecting savings.
A report released in June by the National Bureau of Statistics highlighted that the persistent inflation and the depreciation of the naira had eroded the N13.72 trillion that workers’ salaries gained in the last four years. The World Bank’s Nigeria Development Update report for June 2023 further revealed that accelerating inflation had pushed an additional four million Nigerians into poverty in the first five months of 2023.
Economist Prof. Sheriffdeen Tella from Olabisi Onabanjo University noted that the 23 instances of inflation increase in the past two years indicate a continuous rise in the number of Nigerians falling into poverty with each surge. He emphasized the cyclic effect of inflation, leading to reduced purchasing power, decreased production, and subsequent layoffs in the real sector of the economy. Tella stressed that the unrelenting inflationary pressure has contributed to a decline in the standard of living and increased poverty.
