Researchers at Comercio Partners, a leading trading, investment and advisory services providers have projected that Nigeria’s inflation would sustain the current surging trend in the months ahead, despite ongoing policy measures by the Central Bank of Nigeria (CBN) and the fiscal authorities to moderate the general price level in the economy.
The experts, in the just published ‘Inflation Watch’ report for November 2023 by the firm, hinged their forecast on the rising food items costs, with food inflation rising above 30bps in November this year, thereby depicting further tightening of food supply within the Nigerian economy.
In addition, the analysts noted the persistent weakening of the Naira against the US dollar that had also been spurring higher importation costs even as the challenges of FX rate and global oil prices’ volatility continue unabated.
According to them, the oil prices volatility act as a double-edged sword as Nigeria remains an importer of finished petroleum products.
While describing the planned first crude oil refined products from Dangote Refinery as eliciting hope among Nigerians once again, despite the delayed timeline, the researchers projected that production and distribution of refined products will play a hand in improving fuel-related issues in the country.
The analysts, however, do not see immediate positive effects from this as the firm would not be kicking off with fuel production activities first.
They clarified: “Admittedly, with the rainy season coming to an end, Main Harvest activities are underway. Conversely, we perceive high transportation costs trickling into food costs, which translate to high food inflation in the ensuing months.
“Conclusively, with a depleting FX reserve, high exchange rate and costly food distribution, we foresee higher inflation rates in the ensuing months”, the analysts predicted.
