According to latest data released by the National Bureau of Statistics, NBS, in September inflation rose to 17.9% compared to 17.6% posted in the month of August.
The NBS said in its summary note that the increase in the index to 17.9% was as a result of increases recorded across ‘COICOP divisions which contribute to the Headline Index. Communication and Restaurants and Hotels recorded the lowest rates of increase of the 12 divisions, growing by 5.6 percent and 9.6 percent respectively’.
Yet another straight month of a steady rise in consumer prices. This nearly divergent from analysts’ opinions who opined that Nigeria’s skyrocketing inflation was tapering. The major factor contributing to the rise in September inflation is no other than the crisis the continuous pressure the Naira is facing.
Nigeria has been battling the worst revenue drought since global oil price plummeted to its lowest in 20 years. As at the time of writing this report, WTI Crude was about USD51 per barrel. Nigeria’s revenue crisis is also exacerbated by factors beyond its control. However, factors within the control of Nigeria has not been properly managed.
The Forex market has been coordinated in a haphazard manner that is worsening Nigeria’s inflationary tendencies. Koko Bola Onadele, Managing Director/Chief Executive Officer at FMDQ OTC Securities Exchange(Nigeria’s official Forex trading market) told Bloomberg that the Central Bank of Nigeria’s continuous interference in the price of the Naira (NGN) against the Dollar (USD) is a major problem mitigating local and foreign investors from thinking growth and investing in Nigeria.
The come back of the parallel market as approved by the CBN has further driven the Naira to the lowest ever against the Dollar. Onadele expressed his fear that the parallel market is getting bigger than the primary market. The fear of bank leaders from being sanctioned should they quote divergent prices is also a problem that keeps the Naira in a state of continuous pressure.
Mark Mobius, the Chairman of Templeton Emerging Markets Group, a company that owns many equity holdings in blue chips companies across Africa, predicted that oil will hit USD60 per barrel before the end of the year. The possibility of this prediction is shaky given the fact the OPEC has not finalized its output capping.
