Nigeria’s year-on-year inflation rate rose for the seventh consecutive month in August 2022 to 20.52%, while the month-on-month rate for the same period declined from 1.82% to 1. The rate declined to 77%. The depreciation of the local currency, supply disruptions in food products, and rising production costs are believed to have contributed to the latest increase.
Currency depreciation drives inflation
According to the latestdatafrom the Nigerian National Bureau of Statistics (NBS), the West African country’s headline inflation rate for August 2022 was above 20.52%. The latest rate is 3.51 percentage points higher than the 17.01% recorded in August 2021.
The surge marks the seventh consecutive month that Nigeria has posted a year-on-year (YoY) inflation rate increase. According to the statistical agency, the depreciation of the local currency is one of the main reasons for the YoY inflation spike.
As reported by Bitcoin.com News, the exchange rate of the Nigerian currency against the US dollar plummeted to its lowest level in late July 2022. The country’s central bank blames speculators for their role in weakening the local currency, but some economists argue that the ongoing shortage of foreign currency is a major cause.
In addition to currency weakness, the NBS also pointed to disruptions in food supplies and rising general production costs as factors that drove up inflation in the same period last year.
MoM Inflation Decline
However, despite the latest surge in the country’s YoY inflation rate, NBS data showed that MoM inflation declined to 1.77% in August 2022 from 1.82% seen in July 2022. The rate declined slightly. With regard to the country’s consumer price index (CPI), the statistical agency stated.
The average change in the CPI for the 12 months to August 2022 relative to the average of the CPI for the previous 12 months was 17.07%, representing an increase of 0.47% compared to the 16.60% recorded in August 2021.
Meanwhile, NBS data indicate that year-on-year inflation in urban Nigeria (20.95%) is slightly higher than in rural Nigeria (20.12%). On a month-over-month basis, the rural inflation rate declined by 0.06% from 1.81% in July 2022 to 1.75% in August 2022, while the urban rate declined by only 0.03%.
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