Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 21)

Consumer prices decreased for the first time since August 2019, though marginally. Inflation rates decrease from 18.17 percent in March 2021 to 18.12 percent in April 2021.2 The decrease in inflation rate is driven by a reduction in food component of inflation from 22.95 percent to 22.72 percent which outweighed a 0.07 percent increase in core inflation within the review period. While the decline in inflation is a good development, inflation rate in Nigeria is still on a high, and double digit which remains counterproductive for economic stability. The Nigeria’s inflation problem is primarily driven by low levels of aggregate supply due to poor productivity levels, and the volatility of the Nigerian Naira emanating majorly from the shocks in crude oil prices. The need to boost productivity remains a priority for a decline in price level. Factors that aid the increase in aggregate supply should be identified and prioritized as well.

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