The International Monetary Fund has projected that Nigeria’s Consumer Price Index will hit 16.1 per cent in 2022.
This projection was presented in a tabular illustration in the IMF’s Regional Economic Outlook for Sub-Saharan Africa released last week, which was published on its website.
The projected 16.1 per cent will be the highest in the country since October 2021 when it was 16.63 per cent.
Recent figures from the National Bureau of Statistics showed that Nigeria’s Consumer Price Index rose to 15.92 per cent in March.
This new rate is the highest the country has recorded since October 2021, when the inflation rate hit 15.99 per cent.
The rise in the inflation rate in March shows that Nigeria is not left out in the global inflation surge.
However, the IMF added that the inflation rate would drop to 13.1 per cent by 2023.
In its World Economic Outlook report, the IMF warned about the effects of inflation.
The report read in part, “In sub-Saharan Africa, food prices are also the most important channel of transmission, although in slightly different ways. Wheat is a less important part of the diet, but food, in general, is a larger share of consumption.
“Higher food prices will hurt consumers’ purchasing power, particularly among low-income households, and weigh on domestic demand. Social and political turmoil, most notably in West Africa, also weighs on the outlook.”
Recently, the World Bank said COVID-19 pandemic-induced inflation pushed about 23 million Nigerians into a food crisis in 2021, especially in regions battling conflicts.
The Washington-based bank said this in its latest Commodity Markets Outlook report in reference to the Global Report on Food Crises.
According to the bank, rising food prices have heightened food insecurity in emerging markets and developing economies, especially due to food import dependence on Ukraine and Russia.
It further stated that before the war in Ukraine, the pandemic had triggered food insecurity across the world.
It added that the war-driven disruptions in the food trade, higher food price inflation, and higher costs of administering food assistance efforts are likely to make more people food insecure.
Aside from the pandemic and the ongoing war in Ukraine, the World Bank in a different report had said that import restrictions and non-flexible exchange rate management of the Central Bank of Nigeria were the major driving forces for food inflation in Nigeria.
The report had read in part, “Rising food prices are the underlying factor behind the surge of headline inflation in Nigeria. Food prices have increased due to import restrictions and a nonflexible exchange rate management.
“The current regime is keeping the official exchange rate of the naira artificially strong while the naira has weakened significantly on the parallel market. Additionally, the central bank has restricted importers’ access to foreign currency for 45 products and has reduced the supply to other importers.”