Nigeria inflation rises in September despite central bank rate hikes

By Chijioke Ohuocha

ABUJA (Reuters) -Inflation in Nigeria rose for the eighth straight month to 20.77% in September from 20.52% in August, the statistics bureau said on Monday, despite the central bank’s sharp rate hikes to try to tame price increases.

Policy-makers in Nigeria maintain that persistent inflationary pressures are structural and largely imported. Analysts say inflation is driven by dollar scarcity, high diesel cost and excess liquidity.

High inflation, weak economic growth and mounting insecurity are major issues for voters as Nigeria heads for national and presidential elections in February, in which incumbent President Muhammadu Buhari will not take part in due to term limits.

Refinitiv data showed that year-on-year inflation in Nigeria has remained at its highest level since September 2005.

The central bank has hiked rates by a total of 400 basis points this year, its most hawkish in an annual cycle, in an attempt to rein in inflation and ease pressure on the currency.

It hiked its main lending rate to 15.50% in September, its highest level yet.

The National Bureau of Statistics (NBS) said food supply disruption, import cost hike due to currency weakness and rise in production costs were likely factors for increases in price levels.

A separate food price index showed inflation at 23.34% in September, compared with 23.12% in August, as Nigerians continued to face higher prices for staples like rice and bread.

Nigeria expects inflation to remain in double digits, averaging 17.16% next year, Buhari said in his 2023 budget speech this month.

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