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Nigerian inflation rises to 11-year high

The IMF has said Nigeria's economy could contract for the first time in more than two decades this year as a fall in oil revenue and electricity shortages weigh on output. (Representative image) Photograph: (Getty)

AFP Abuja, Nigeria Jul 18, 2016, 10.30 AM (IST)
Inflation surged to 16.5 per cent in Nigeria last month -- its highest level in more than decade -- as prices of imported food and energy jumped after the government stopped propping up the currency, the National Bureau of Statistics said today.

The rate rose from 15.6 per cent in May, the fifth increase in as many months, the NBS said in an emailed statement. The new rate is the highest since October 2005, according to the central bank.

The highest increases were seen in electricity prices, kerosene, furniture and furnishings, road passenger transport, as well as fuels and lubricants, the statistics agency said.

Food prices rose 15.3 per cent year-on-year in June, compared with 14.9 per cent in May. Yvonne Mhango, an economist at Renaissance Capital, told Bloomberg she expected inflation to rise further in the coming months.

"We see inflation averaging in the mid 20 per cent by year-end, mainly because of the foreign exchange rates," she was quoted as saying.

Nigerians are struggling with spiralling cost of living after a 67 per cent hike in the price of petrol in April and last month's scrapping of the peg of the Naira exchange rate at 197/199 to the Dollar. The Naira now trades at around 360 to the Dollar on the black market. The official rate is at about 280 to the Dollar.

Nigeria, one of Africa's main oil producers, normally gets 70 per cent of its revenue from oil sales. But the global fall in crude prices since mid-2014 has left the government cash-strapped and even unable to pay wages.

Public sector workers in most of the country's 36 states are on strike because of unpaid salaries, with some owed six months' back pay. The International Monetary Fund has said Nigeria's economy could contract for the first time in more than two decades this year, as a fall in oil revenue and electricity shortages weigh on output.

(AFP)
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