In July, inflation reached 19.6 % in the “greatest economy in Africa”, faced with a persistent crisis, with just over six months before the presidential election of 2023.
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Bad news is accumulating for the economy of Nigeria. Monday, August 15, the National Statistics Office announced that inflation had jumped for the sixth consecutive month, reaching 19.6 % in July in annual shift, its highest level for almost seventeen years.
Price explode in all sectors, whether energy, transport or food. “Unlike many countries where energy expenditure weighs heavily on household budget in Nigeria, people spend most of their salary in food,” recalls Cheta Nwanze, of the SBM Intelligence research cabinet.
Food inflation thus reached 22 % in July, while a Nigerian home spends on average 57 % of its income to feed, much more for the poorest. The insecurity that affects agricultural regions and the flight of farmers forced to leave their land to escape jihadists or armed groups partly explain the poor performances of Nigerian agriculture according to Cheta Nwanze. But the analyst also evokes “poor political choices” and points to protectionist measures and high taxes on imports of certain basic products.
Despite the outbreak of prices, the oil revenues of Nigeria have not increased in recent months. Structural mismanagement, corruption and flights along the pipelines hinder national production, which stagnated at 1.238 million barrels per day in July, well below the quota of 1.799 million allocated by the organization of the exporting countries of Oil (OPEC). However, Nigeria needs American dollars to finance its imports of food, but also fuel, since none of the country’s refineries are operational.
To compensate for this ubiquitous situation, the government of the first gross producer in Africa spends mad sums in subsidies in order to maintain the price of petrol at the pump at 165 nairas (some 40 cents). During a hearing before the National Assembly Thursday, August 18, the Minister of Finance revealed that Nigeria currently pays 18.69 billion Nairas (more than 44 million euros) each day to finance this measure as expensive as they are controversial .
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