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As Nigeria’s year-on-year inflation rose for the seventh consecutive month to 20.52% in August 2022, the latest data from Nigeria’s National Bureau of Statistics shows that the one-month rate on the other rose from 1.82% to 1.77% over the same period. . Depreciation of the local currency, disruptions in food supplies and an increase in production costs are believed to be the factors behind the latest increase.

Currency depreciation fuels inflation

According to the last Data from Nigeria’s National Bureau of Statistics (NBS), the West African country’s headline inflation for the month of August 2022 topped 20.52%. The latest rate is 3.51 percentage points higher than the 17.01% recorded in August 2021.

Nigerian Inflation Rate Rises to 20.52% in August - Rates Drop Month-on-Month

With this latest surge, Nigeria has now seen its year-on-year (YoY) inflation rise for the seventh consecutive month. According to the statistical body, the depreciation of the local currency is one of the main factors behind the surge in the year-on-year inflation rate.

As reported by News, the exchange rate of the Nigerian currency against the US dollar plunged to a new low in late July 2022. As the country’s central bank blamed speculators for their role in weakening the local currency, some economists say the current shortage of foreign currency is largely to blame.

Apart from the currency depreciation, the SNB also pointed to food supply disruptions and rising general production costs as other factors that caused the year-on-year inflation rate to rise.

Inflation down month on month

However, despite the country’s latest surge in year-on-year inflation, SNB data suggests that month-on-month inflation has eased slightly from 1.82% seen in July 2022 to 1 .77% in August 2022. Regarding the country’s consumer price index (CPI), the statistical body said:

The percentage change in the average CPI for the twelve-month period ending August 2022 compared to the average CPI for the previous twelve-month period was 17.07%, showing an increase of 0.47 % compared to the 16.60% recorded in August 2021.

Meanwhile, NBS data shows that the year-on-year inflation rate in urban Nigeria (20.95%) was slightly higher than in rural Nigeria (20.12%). Month-to-month, the rural inflation rate declined by 0.06% from 1.81% in July 2022 to 1.75% in August 2022, while the urban rate only declined than 0.03%.

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Terence Zimwara

Terence Zimwara is an award-winning journalist, author and writer in Zimbabwe. He has written extensively on the economic issues of some African countries as well as how digital currencies can provide an escape route for Africans.

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