Notwithstanding the bold rate hikes from the Central Bank of Nigeria, headline inflation in Nigeria hit a 17-year high as the currency continues to weaken.
Headline inflation quickened to 20.8 percent y/y in September from 20.5 percent y/y in August. On a month-on-month basis, consumer prices rose by 1.36 percent in September. The statistics agency highlighted that disruptions in the supply of food products, higher import costs due to persistent currency weakness and the general increase in the cost of production were some of the main factors underpinning inflation in September.
Note that the naira has depreciated by almost 7 percent against the US dollar since September 2021. With the bearish bias in the naira showing little sign of letting up and food supply risks still elevated, risks to the inflation outlook remain skewed firmly to the upside.
