Nigeria's inflation rate soars to 28-year high

Nigeria's inflation rate soared to more than 28-year high in May as higher food and transport prices continue to ravage the economy. This comes against the backdrop of the World Bank approving a $2.25 billion loan to support economic reforms in the country.

Data shows that consumer prices climbed to 33.95 per cent in May, compared with 33.7 per cent in April. Food inflation also rose to 40.66 per cent in May from 40.3 per cent in April. Depreciation of currency has also contributed to inflation. The local currency, the Naira, has dropped 70 per cent against the dollar since June last year.

This food crisis is largely driven by twomajor factors - partial removal of fuel subsidies and the floating of currency. This is also the worst economic crisis facing Nigeria in decades. The once-biggest African economy has now fallen to fourth place this year.

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The bulk of the World Bank loan, $1.5 billion, is set to assist millions facing poverty; the rest will go to support tax reforms & safeguard oil revenues. Despite being a major oil producer, Nigeria has struggled with high imports, underinvestment, & mismanagement.

Bloomberg analysts are optimistic that some relief might be on the horizon. This is due to upcoming reforms around suspending import duties on certain essentials for six months and increasing minimum wages. Annual inflation is expected to gradually slow to around 32 per cent at year-end, while the rate-hike cycle is expected to end in July.

Nigerians are struck in the 'future land' while their present is clouded with unprecedented turmoil. The country is facing its worst cost-of-living crisis in years. However, Nigeria's president, Bola Tinubu,said his economic reforms will continue despite increasing hardships.