April inflation seen rising on food, diesel price hikes
Ahead of the release of the consumer price index report by the National Bureau of Statistics (NBS), analysts have said the inflation rate for April will be higher than the previous month.
All the analysts polled by BusinessDay expect inflation rate to inch up as a result of continued rise in food and diesel prices.
Nigeria’s inflation rate rose to 15.92 percent in March 2022, which represented a 0.22 percentage point increase from the 15.7 percent recorded in February 2022, data from the NBS show.
Taiwo Oyedele, head of tax and corporate advisory services at PwC, said given the sustained increase in the prices of major food items partly due to the ongoing crisis in Ukraine as and the rising price of energy, particularly diesel, it is expected that the upward pressure on inflation would result in a marginal increase in the consumer price index for April.
“Inflation may inch up due to continued hardship as suppliers and retailers mark up their prices on everything. Also fuel crisis continues in parts of the country”, Tope Fasua, CEO of Global Analytics, said.
Ayodele Akinwunmi, relationship manager, corporate banking at FSDH Merchant Bank Limited, said inflation rate would likely increase from the current level.
Ayodeji Ebo, chief business officer, Optimus by Afrinvest, expects inflation to rise.
“Inflation is expected to remain considerably high in the short term, even as some Advanced Economies progress with interest rate lift-off,” Godwin Emefiele, governor of the CBN, said at the last Monetary Policy Committee meeting (CBN) in March.
To address the inflationary pressures, Edward Lametek, deputy governor at CBN, was of the view that the domestic production should increase.
He said at the last MPC meeting: “While acknowledging the challenge posed by inflation as evidenced by the increase in the core and headline measures of inflation in February 2022, I believe that the surest way to address this is to increase domestic production and ease the bottlenecks to free circulation of goods within the country.
“In this regard, not only should the flow of credit to the real economy be sustained, the government must continue to tackle the problems of insecurity and infrastructure to reduce production and distribution costs.”
Festus Adenikinju, member of the MPC, said, “I do not believe that we can totally take our eyes away from the rising and persistent inflation build-up in the economy.
“While I agree that the current inflation is largely supply-driven, we need to deal with inflation expectations, which if not properly anchored, will compromise long-term investment and economic growth.”
He said the headline inflation had risen consistently since November 2021, adding that the February inflation figure was the fourth straight month of rise in the average price level.
“There is a build-up of inflation expectations in the economy. This will be compounded by the increased spending associated with electioneering in Nigeria. The CBN, being the only institution vested with the responsibility to maintain price stability, must address this inflationary tendency,” Adenikinju said.