Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 27)

According to the latest transport fare watch by the National Bureau of Statistics (NBS), the average cost of air transport was N55,906.86 in May 2022, an increase of 52.95 percent from N36,552.70 paid in May 2021.4 Similarly, the cost of an inter-city bus journey stood at N3,668.64, suggesting an increase of 47.3 percent from N2,490.60 a year ago. The rise in transport costs is partly due to the hike in energy prices, the short supply of petroleum products and currency depreciation. The rising cost of transportation would feed into general price increases, lowering people’s purchasing power and eroding their standard of living. In the interim, there is a need for the government to dialogue with the private sector in designing frameworks that would improve the supply of petroleum products. In the medium term, the government should prioritise implementing the Petroleum Industry Act (PIA) to attract investors to invest in new refineries to increase the supply of refined petroleum products, thereby reducing the country’s reliance on other countries for its energy products. This intervention would minimise the effects of currency depreciation on energy prices.

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