According to the National Bureau of Statistics, Nigeria’s composite price index (CPI), which monitors inflation, increased to 21.82% in January 2023.
This comes amid a naira shortage caused by the Central Bank of Nigeria’s currency reform strategy.
The January inflation rate is 0.48 percentage points higher than the December inflation rate of 21.34 per cent.
This is a new 17-year high after the first decline in inflation occurred in December 2022. Prior to December, Nigeria’s inflation rate had risen steadily for eleven consecutive months.
In 2022, the NBS attributed the spike in inflation to disruptions in the supply of food supplies, increases in import costs due to the naira’s depreciation, and an overall increase in the cost of manufacturing.
In its ‘Consumer Price Index’ for January 2023, the national statistics organization stated, “In January 2023, the headline inflation rate increased to 21.82 percent from December 2022’s headline inflation rate of 21.34 percent.”
“Based on the pattern, the January 2023 inflation rate was 0.47 percentage points higher than the December 2022 inflation rate. On an annualized basis, however, the headline inflation rate was 6.22 percentage points greater than the rate reported in January 2022, which was 15.60 percentage points.
This indicates that the headline inflation rate (year-over-year) increased in January 2023 compared to the same month the previous year (i.e., January 2022).
According to the National Bureau of Statistics, there have been increases in the prices of bread and cereal, actual and assumed rent, potatoes, yam and tubers, vegetables, and meat.
According to the CBN, the redesigned naira would aid in containing inflation. Recently, the CBN Acting Branch Controller in Ondo State, Mr. Giwa Ademola, stated, “The benefits of the currency redesign to the Nigerian economy are enormous, as this policy will help to control inflation by bringing hoarded currency into the banking system, thereby making monetary policy more effective.
We will have far more accurate statistics on money supply and monetary aggregates, which will aid in the design and implementation of monetary policy.