Nigeria’s economy is finally showing some sign of recovery as headline inflation fell to 17.78% year on year.
This is according to data released by National Bureau of Statistics.
The February data represents the first time in 15 months that the headline CPI has declined on year on year basis representing the effects of slower rises in already high food and non food prices and favourable base effects over 2016 prices.
It is 0.94 percent points lower from the rate recorded in January (18.72) percent. The new data is also close to the prediction of the Access Bank Economic Intelligence Unit which predicted over the weekend that headline inflation for the month of February will fall to 17.1%.
While this does not mean Nigeria’s recession is over and or there is a concrete economic policy in place, there are major reasons and positive moves and trends that contributed to the slower rate.
THe relative peace in the Niger Delta has reduce the pace of pipeline vandalism coupled with a higher crude oil price has increased imperial dollar (USD) earnings for Nigeria. As at yesterday, Nigeria’s foreign reserves has increased to over USD30 billion compared to less than USD26 billion reported in eight months ago. This has further eased pressure on the Naira (NGN). The gap between the parallel market and the official interbank rate has is closing up ad Forex demands are getting some attention more eve before.
Also, the stability in the average price of petroleum across the country has reduced rate of inflation on food prices and other services. This has also been cushioned by the recent fall in crude oil price due to shale oil producers pumping more oil to benefit for higher crude prices.
However, the data for February still shows that there is still much pains at least suffered by Nigeria’s poorest population. Food sub index rose by 1.99% in the month under review compared to 1.29% in January. The government will have to ensure policies are geared towards ensuring importers and manufacturers of food items have access to Forex to bring down prices so as to ensure social stability is maintained in the short and medium term before the recession ends.