18.6 percent Nigeria’s Inflation Rate: Building resilience responses against negative economic projections

Economic realities in Nigeria have posed their blows of unfriendly woes in recent times. The impacts at the local level have been so strong with turbulence, making conditions of living unbearable for many. The plight of the larger masses, recently, as the woes of the economy wax grossly tough, has been growing with troubles of discomfiture. The increasing terms of certain growing deficiencies have had their grip clustering to pose harsh conditions, the brunt of which the masses are suffering.

Groping with worsening rise in inflation rate is one close reflections of the economic trouble Nigerians are largely suffering from. Increasingly, inflation rate has become a deficient index, reflecting sharply the wobbling profile of the economy. The National Bureau of Statistics (NBS) in its Consumer Price Index (CPI) released on Friday, the 15th July, 2022 disclosed Nigeria’s inflation rate had hit 18.6 percent in June. The increase forms the seventh consecutive monthly rise. This represents a 0.9 percent point rise when compared to 17.7 percent recorded in May. The report noted food inflation to have increased by 1.1 percent point to 20.6 percent from 19.5 percent in May. “In June 2022, the inflation rate increased to 18.60 percent on a year-on-year basis. This is 0.84 percent points higher compared to the rate recorded in June 2021, which is 17.75 percent. Increases were recorded in all COICOP divisions that yielded the Headline index. On a month-on-month basis, the Headline inflation rate increased to 1.82 percent in June 2022, this is 0.03 percent higher than the rate recorded in May 2022 (1.78 percent).

“The composite food index rose to 20.60 percent in June 2022 on a Year-on-Year basis; the rate of changes in average price level declined by 1.23 percent compared to 21.83 percent in June 2021. The rate of changes in food prices compared to the same period last year was higher due to higher foods prices volatility caused by COVID-19. This rise in the food index was caused by increases in prices of bread and cereals, food products, potatoes, yam, and other tubers, meat, fish, oil and fat, and wine,” the report had read.

The heightening inflation rate have left unsavoury conditions for the masses. The plight of eroding purchasing power by the scourge of inflation and currency devaluation have posed their challenges with scorching impacts.  This is just as economists and financial analysts in their projections have not ceased to aver further inflationary pressure for the remaining half of the year, citing the negative impacts of the first half of the year.

The impacts of hyper-inflation to worsen erosion of purchasing power, decline in aggregate demand with attendant strains in productivity and employment, would, without doubt, bear their impacts to worsen already weakened socio-economic fabrics of the Country. Clustered circumstances brewing out of same may badly worsen harsh conditons which would continue to push the force of desperation for survival, with metabiotic strings to further heighten resort to sharp practices and insecurity menaces.

Last week, the International Monetary Fund (IMF) relying on macro-economic intelligence, said inflation, debt, and forex crises are pushing the Nigerian economy and other African economies to the brink. The Managing Director of the IMF, Kristalina Georgieva,  in a report titled, ‘Facing a Darkening Economic Outlook: How the G20 Can Respond, on the IMF’s website, released on Wednesday, 13th July, 2022, towards the backdrop of a meeting of G20 ministers and central bank governors, had mentioned that ministers of finance and central bank governors on the African continent had noted the deficiencies and threats of sliding into a brink. “The particularly difficult conditions in many African countries at this moment is important to consider. In my meeting with Ministers of Finance and Central Bank Governors from the continent this week, many highlighted how the effects of this, entirely exogenous, shock was pushing their economies to the brink. The effect of higher food prices is being felt acutely as food accounts for a higher share of income. Inflation, fiscal, debt and balance of payments pressures are all intensifying. Most are now completely shut out from global financial markets and unlike other regions don’t have large domestic markets to turn to. Against this backdrop, they are calling on the international community to come up with bold measures to support their people. This is a call we need to heed,” the report noted.

According to Georgieva, the human and economic impact of the war in Ukraine has worsened with commodity price shocks and an increase in cost of living leading to a crisis for hundreds of millions of people. According to her, inflation is now higher than expected and has broadened beyond food and energy prices, which has prompted major central banks to announce further monetary tightening.  “It is going to be a tough 2022—and possibly an even tougher 2023, with increased risk of recession. That is why we need decisive action and strong international cooperation, led by the G20. Our new report to the G20 outlines policies that countries can use to navigate this sea of troubles,” Georgieva noted.

Economic projections for Nigeria have not been enticing. The reflections of the expression have been projections of worsening conditions. Heightening of inflation has been much in view. It is pertinent for the Nigerian Government to, as a matter of emergency, strategically concert efforts towards cushioning the impacts of the prevailing situation, while critically giving considerations to the blend of policy measures to assuage the harsh projections set before the Country. Leaving the system to itself would be tantamount to slaying the economy before the woes of turbulent circumstances. It is pertinent that the Government remodel its frameworks of policies for reconditioning of the system for strategic responses to negative projections set before the Country. While it is groping to grapple with the reality of insecurity menaces among myriads of sharp illegalities, situations might wax gross beyond measure if conditions are left to assume tougher dimensions in a state that may render the society in shambles of discomfort.