Inflationary Tide Turning- CBN
By Patience Ikpeme
A glimmer of hope has emerged in the fight against inflation as Nigeria’s headline month-on-month inflation rate dipped for a third consecutive month.
This positive trend aligns with the Central Bank of Nigeria’s (CBN) recent policy tightening measures, suggesting their effectiveness in curbing rising prices.
Data released by the National Bureau of Statistics (NBS) reveals a steady decline in inflation. May 2024 saw headline inflation fall to 2.14%, compared to 2.29% in April and a concerning 3.02% in March. The CBN highlights that this downward trend extends even further back, with the monthly rate dropping from a peak of 3.12% in February.
The positive trend extends to food inflation, a vital concern for Nigerian households. May witnessed a decrease in food inflation for the third consecutive month, falling to 2.28% from 2.50% in April and a sharp 3.79% in February. This decline indicates a slowdown in price increases for essential goods, offering some much-needed relief for consumers.
The CBN’s Monetary Policy Committee (MPC) expressed confidence in their strategy, a combination of tighter monetary policy and collaboration with the Federal Government on coordinated fiscal measures. This approach aims to effectively address the sharp increase in the cost of living experienced by Nigerians since the aftermath of the COVID-19 pandemic.
While year-on-year inflation continues to show a slight increase, it’s the month-on-month figures that hold greater significance. These isolate the impact of policy changes since the CBN began raising interest rates in February.
“Slowly but surely, the inflation tide is turning,” stated Muhammad Sani Abdullahi, Deputy Governor, Economic Policy Directorate at the CBN. He acknowledged that the impact is not yet uniform across all measures, including year-on-year figures on a national scale.
However, Mr. Abdullahi expressed the CBN’s commitment to continued diligence in coordinating policy measures to ensure the worst of the inflationary cycle is soon behind Nigeria.
The month-on-month inflation slowdown is a nationwide phenomenon, reflected in the declining pace of price rise for essential food items. Additionally, year-on-year inflation showed a decrease in thirteen Nigerian states, including Abuja, Akwa Ibom, Borno, and Rivers.
CBN Governor Olayemi Cardoso prioritizes tackling inflation, recognizing it as a crucial step towards achieving sustainable economic growth in the mid-to-long term and ultimately improving the lives of ordinary Nigerians. The recent positive trends are a testament to the CBN’s commitment to this goal.
