Recent findings by Findwhosabi reveal a staggering 24-fold increase in Nigeria’s inflation rate over the last 25 months, based on an analysis of the Commodity Price Index reports from the National Bureau of Statistics.
Between October 2021 and October 2023, the inflation rate experienced a relentless surge, with a singular exception in December 2022 when it briefly slowed to 21.34% from the 21.47% recorded in November 2022. Throughout the reviewed period (October 2021 – September 2023), inflation soared from 15.99% to a concerning 27.33%.
Inflation, as defined by Investopedia, signifies a rise in prices, reflecting a decline in purchasing power over time. This trend is evident in the average price increase of a selected basket of goods and services. The repercussions are felt as a unit of currency buys less than it did in preceding periods.
The impact of this inflationary surge is starkly illustrated in the erosion of purchasing power for ordinary Nigerians. A hypothetical scenario compares a monthly salary of N100,000 two years ago to the present day, where prices have reached record highs. Monthly expenses of N50,000 now represent more than 50% of the salary, affecting the amount saved each month.
The National Bureau of Statistics, in a June report, highlighted that the continued depreciation of the naira and persistent inflation had effectively eroded the N13.72tn gained in workers’ salaries over the last four years.
Furthermore, the World Bank, in its Nigeria Development Update report for June 2023, disclosed that accelerating inflation had propelled an additional four million Nigerians into poverty within the first five months of 2023. The loss of purchasing power due to high inflation exacerbated poverty in the short term.
This stance aligns with the World Bank’s lead economist in Nigeria, Alex Sienaert, who previously noted that rising inflation had significantly reduced the purchasing power of Nigerians, positioning the country’s consumer price inflation among the highest globally.
Speaking exclusively to The Findwhosabi, Prof Sheriffdeen Tella, an economist at Olabisi Onabanjo University, emphasized that the persistent inflationary pressure has created a cycle, spiraling from reduced purchasing power to diminished production, leading to layoffs in the real sector of the economy.
In Tella’s analysis, the 23 instances of inflationary increases in the past two years indicate a deepening poverty crisis, with the cyclical effects impacting both the cost and standard of living in the country.