Nigeria Inflation Soars To Almost Four-year High Of 12.8%

 

Nigeria’s inflation rate climbed to the highest in almost four years in March, adding pressure on the central bank to ease foreign-exchange controls that are pushing up food and fuel prices.

Inflation in Africa’s largest economy and oil producer accelerated to 12.8 percent on an annualized basis, the highest since July 2012, from 11.4 percent in February, the Abuja-based National Bureau of Statistics said by e-mail on Tuesday. Food prices rose 12.7 percent in March from a year ago, compared with 11.4 percent in the previous month, driven up by transportation costs, the planting season and foreign-exchange movements, the statistics agency said.

The Nigerian central bank has pegged the naira at 197-199 per dollar since March last year, and restricted trading in foreign currencies, making imports more costly for a nation that’s a net importer of refined fuel and food products. Importers struggle to access foreign exchange at the official rate, with the naira falling to around 320 on the black market. The nation imports at least 70 percent of refined fuel, despite pumping two million barrels of crude a day, and faces fuel shortages.
“It looks like the fuel problem won’t go away in the short term, and we think inflation could rise to 14 or 15 percent this year,” John Ashbourne, an economist at Capital Economics Ltd. in London, said by phone on Tuesday. “The inflation rate could add pressure to accelerate further interest-rate increases.”

The central bank increased its benchmark interest rate by 100 basis points to 12 percent last month after inflation accelerated to more than 10 percent in February. Price growth has been outside the government’s 6 percent to 9 percent target band for 10 months.
Median Estimate

The median of 16 economist estimates compiled by Bloomberg was for inflation to reach 11.8 percent. Consumer prices rose 2.2 percent in March from the month before.