Consumer prices for the month of December 2019 increased by 0.13 percentage points from the preceding month which stood at 11.85% 1. As such, inflation has increased for four consecutive months and the current rate is 0.54% percentage points higher than the inflation rate in December 2018. The rise in inflation was driven by a rise across all components, with the core sub-index growing by 0.34% to 9.33% and food sub-index by 0.19% to 14.67% over a month. The rising inflation is underscored by an increase in access to credit, as indicated in the Central Bank of Nigeria Credit Condition Survey. The survey conducted notes that there was an increase in supply of secured loans to households which was expected to increase in Q1 2020 as well as a rise in overall credit supply to the corporate sector2. In addition, the closure of the Nigeria-Benin border is likely to have driven food prices up due to a reduced supply of staple foods including rice and frozen food. Going forward, we expect a continuous rise in inflation as government directives to close the border and increase lending to the private sector are in effect
February 4, 2020
Nigeria Economic Update (Issue 03)
Related
Nigeria Economic Update (Issue 51)
Recently released data by the National
Bureau of Statistics (NBS) shows that there was significant increase in Nigerias
total merchandise trade for 2016Q3. Basically, the total merchandise trade
increased (quarter-on-quarter) by 16.29 percent to N4, 722 billion in 2016Q3;owing to 29.1 percent increase in exports and 6.2 percent rise in imports. Oil
exports increased by 31 percent to N1, 943 billion, while non-oil exports
increased by 20.5 percent to N440 billion. However, on the aggregate, Nigeria
recorded yet another trade deficit of N104 billion, indicating continuous
higher imports relative to exports. Overall, though there is improvement in the
performance of non-oil sector, however, this is insufficient to effectively
complement the loss in oil trade sustained since the beginning of oil price
crash. This suggests that diversification into non-oil sector may not be able
to rescue the economy in the short term. However, while the diversification
efforts should be sustained, eliminating hurdles in oil production may be
instrumental to higher exports, especially as oil price increase is gaining
momentum.
Nigeria Economic Update (Issue 27)
The
Naira strengthened against the dollar in the review week. Specifically, the
Naira appreciated by 2.7 percent to N355/$ (parallel market rate) on June 17, 2016,
following the release of the flexible FOREX policy guidelines by the CBN on
June 15, 2016. The new policy effectively adopts a single market structure
hosted at the autonomous/inter-bank market. The inter-bank trading scheduled to
commence on June 20, 2016 will be market-determined, officially eliminating the
N197/$ peg. To ensure foreign exchange liquidity, primary market dealers have
been introduced while the CBN will participate in the market through periodic interventions.