Nigeria: Inflation soars in February on rising food prices and higher import costs

In February, consumer prices increased 2.3% over the previous month, which was well above January’s 0.9% increase. According to the National Bureau of Statistics, the month-on-month increase in prices accelerated to an over-four-year high in February as nearly all the sub-components of the index gained ground over the previous month, with restaurants and hotels being the only exception. Overall, prices are soaring due to severe scarcity of hard currency, higher food prices and the fact that capital controls imposed by the Central Bank are propping up import costs.

Inflation in February shot up from January’s 9.6% to 11.4%. The print represented the highest rate since December 2012 and overshot the 9.9% that market analysts had expected. As a result, annual average inflation ticked up from January’s 9.1% to 9.4% in February, thereby reaching a 29-month high.

Core consumer prices, which exclude farm produce and energy prices, rose 1.6% in February over the previous month, doubling January’s 0.8% rise. Core inflation jumped from 8.5% in January to 9.5% in February.

FocusEconomics Consensus Forecast panelists expect inflation to average 9.8% in 2016, which is unchanged from last month’s forecast. For 2017, panelists forecast an inflation rate of 8.9%.