Nigeria’s Inflation Expected To Persist In The Short Run – Emefiele

Nigeria’s rising inflation is expected to continue in the short run up to the end of 2020, the Central Bank Governor, Godwin Emefiele, has said.

The apex bank governor disclosed this few days before the National Bureau Of Statistics released the recent inflation report.

Nigeria’s inflation had consecutively been on the rise to peak at 12.82 per cent in July which is the highest that has been recorded in the last 29 months.

The CBN Governor said, “The rising inflationary trend which began in September 2019 due to structural factors was aggravated by the pandemic-derived supply shocks.

“From 12.4 per cent in May 2020, year-on-year headline inflation rose to about 12.6 per cent in June 2020, reflecting increases in both food and core components.”

Emefiele partly attributed the rise to the lingering effects of disruptions and challenges around agricultural belts.

He said infrastructural complications driven by covid-19 setbacks to inter-state distribution network was another reason for the rising inflation.

Emefiele noted, ” The spill-over effects of these adverse impulses are expected to persist in the short-termand abet inflation inertia for much of 2020.”

Prices of commodities in the country had in 2019 reacted to the closure of land borders with neighbouring countries.

Consequently, inflation rose to 11.98 per cent by the end of the last quarter of 2019.

The country’s inflation further surged to 12.13 per cent in January 2019 and 12.26 per cent by the end of the first quarter of 2020.

Nigeria had in the witnessed its index case of Covud-19 in late February which led to a total lockdown in March across Lagos state, Ogun and the Federal Capital.

The lock down was extended to different States and a ban on domestic and international travel.

Based on the disruptions, inflation rate surged to 12.56 per cent by the second quarter ending June from 12.40 per cent in May.

Also, the Vice President and Head, Investment Strategy at Sankore Investments, Mr. Robert Omotundegas said that the inflation rate may rise up to 13.5 per cent by the end of this year.

He said this during a live show on TVC and monitored by one of our correspondent.

According to Omotunde, the uptick in the inflation rate is not surprising as the pandemic has brought greater pressure points on consumer price index.

”I was expecting that there will be an increase in the headline inflation and the reasons are not far fetched. You can see that since the advent of covid-19, even before covid-19 we’ve had our own pressure points on Consumer Price Index.

”You know the initial was food prices which continued to rise on a month-on-month basis and from the results you can also see that by classification of individual consumption by purpose, which we read out you’re seeing that they’ve been optic across major line items you know comprising the headline.”

He added that the covid-19 lockdown played a major role in putting pressure on the farm produce as well as farmers as they can no longer produce as much as they should.

”It’s a demand-supply thing, so when we’re shut of production with demand still rising, what you then expect will be an optic in price,” he added.