Nigerians Should Brace Up For Higher Prices In Coming Months, Experts Warn

There are indications that prices will keep climbing over the next few months, as experts call for Nigerians to braze up for more difficult times.

For 16 months in Africa’s largest economy, inflation figures have been on the spike with a recent 15.75 per cent rise recorded in December last year. This was up from the 14.89 per cent seen last November.

The rising rate flaws the Central Bank of Nigeria’s effort to sustain inflation rates between six per cent to nine per cent, a core priority for the apex bank governor Godwin Emefiele.

Nigeria had shut its land borders since 2019 and failed to reopen the borders before the fourth quarters, a move which would have cut the inflation figures.

But Johnson Chukwu, the Chief Executive Officer of Cowry Assets Management, said on TVC that the border closure has caused a spike in inflation rate.

Chukwu said, “Nigerians should braze up for higher inflation rate in the coming months. We may not have a moderation in the inflationary rate until the second half of this year. And that will only come if productivity improves.”

Chukwu said  if the second wave of the Covid-19 pandemic is not adequately addressed, the country could see decline in productivity.

In the new report, core inflation was pushed largely by increases recorded in prices of passenger transport by air, medical services, hospital services, shoes and other footwear, passenger transport by road, and miscellaneous services.

Hairdressing salons and personal grooming establishments, repair of furniture, vehicle spare parts, pharmaceutical products, motor cars, maintenance and repair of personal transport equipment, paramedical services, motorcycle, dental services and bicycles, added to the spike according to the National Bureau of Statistics said.

A Professor of Capital Market Studies and the President, Association of Capital Market Academics of Nigeria, Uche Uwaleke said the increase in inflation is a reflection of the spending during the Christmas and New Year period.

He told THE WHISTLER that, “Given that food inflation remains the major challenge, I expect the inflation rate to moderate this year following the intensification of CBN’s interventions in Agriculture and improvements in forex supply, the implementation of the 2021 Agriculture budget and transport infrastructure, border reopening as well as improvements in Security.

“The rate of increase in Urban inflation gives cause for worry. This may not be unconnected with the rise in rural-urban migration.”

Uwaleke said the new rise was accelerated by the lingering effects of border closure, increase in VAT, electricity tariffs and the pump price of fuel.

Uwaleke called on government agencies to plan ahead to tackle flooding issues detrimental to the farming season to avoid triggering further rise in prices.