Most seasoned analysts in Nigeria might scoff at Nigeria’s current inflation numbers. In a nutshell, there is a widespread belief that Nigeria’s inflation is much higher than official reports. The concerns are valid, given that the inflation basket contains goods we don’t consume as much anymore.
Key Takeaways:
-
Inflation erodes purchasing power. In 2022 alone, the World Bank estimates that 5 million Nigerians were pushed into poverty.
-
Both the International Monetary Fund (IMF) and World Bank expect inflation numbers to decline in 2023. However, global factors and 2023 being an election year suggest otherwise.
-
The main drivers of inflation include spikes in food prices, the CBN’s monetary policy actions, government spending and most importantly, consumer expectation of higher prices.
But this article is not about proving or disproving officially-reported inflation numbers.
The focus is on what we expect Nigeria’s inflation story to be in 2023. This is important to consider
