Nigerian inflation continued its upward trajectory for the tenth consecutive month in October, intensifying expectations for the new central bank governor to consider interest rate hikes in the upcoming monetary policy committee meeting—the first since his appointment.
“Consumer inflation soared to 27.33% year on year in October, marking an 18-year peak, escalating the challenge for the new leadership,” revealed data from the National Bureau of Statistics.
Olayemi Cardoso assumed the role of Nigeria’s central bank governor in September, succeeding Godwin Emefiele, who faced suspension earlier in the year.
Cardoso vowed to redirect the bank away from the criticised fiscal interventions implemented by Emefiele, which had undermined effective inflation management. He pledged a shift towards a “more limited advisory role,” aligning with the government’s economic growth agenda.
The statistics bureau highlighted food and non-alcoholic beverages as the primary drivers of October’s inflation surge in annual terms.
Food inflation, constituting a substantial portion of Nigeria’s inflation index, escalated to 31.52% in October from 30.64% in September, intensifying economic challenges in Africa’s largest economy.
“Inflation has persisted in double digits since 2016, eroding incomes and savings,” remarked David Omojomolo, an Africa economist at Capital Economics, emphasising the urgency for decisive action from the central bank.
Omojomolo underscored the need for aggressive rate hikes to maintain credibility and combat escalating inflation, referencing the central bank’s earlier moderate increase in July, aimed at anchoring inflation expectations while supporting investment.
President Bola Tinubu’s significant reform initiatives have faced scrutiny from labour unions due to their contribution to price pressures, intensifying the broader economic landscape’s challenges.