Consumer prices for the month of December 2019 increased by 0.13 percentage points from the preceding month which stood at 11.85% 1. This rate was 0.54% percentage points higher than 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 rise in inflation was driven in part 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. Inflation is expected to rise in the coming months given that the closure of the Nigeria-Benin border has driven food prices upwards resulting in cost-push inflation. In addition, the CBN’s directive to commercial banks to give out 60% of their deposits as loans to the real sector could potentially lead to demand-pull inflation. Given that food inflation is at the core of the rising inflation, initiatives should be put in place by both state and non-state actors to increase the productivity of farmers in order to transition farmers from smallholder to large-scale farming.
February 11, 2020
Nigeria Economic Update (Issue 04)
Related
Cost Effectiveness Analysis Of Selected Malaria Interventions In Nigeria
This brief highlights the findings of
a cost effectiveness analysis conducted on two malaria intervention programs
implemented in Jigawa State, Nigeria under the National Malaria Control
Programme: the long-lasting insecticide treated nets intervention and the indoor
residual spraying program.
Nigeria Economic Update (Issue 37)
Recent
data by the CBN shows a decline in manufacturing capacity utilization by 2.0
percentage points to 50.7 percent in 2016Q2. Foreign exchange
challenges in addition to cash squeeze in the review quarter, led to the
decline in capacity utilization. This has hindered activities in the sector
while impacting negatively on business confidence. Nonetheless, the CBN
recently directed authorized FX dealers to dedicate 60 percent of FX purchases
to manufacturers. This policy measure is therefore expected to meet
the sectors critical FX need for the purchase of imported raw material and
other machineries, while boosting the potential for economic growth in the long
term.