Massive inflation to hit prices of goods in Nigeria, this is why!

– Nigeria’s Inflation hits 15.6 % in May
– The inflation rate has
worsened consistently since President
Muhammadu Buhari took office in May 2015
– Of the 12 months spent so far, inflation
has risen every month but one, moving from
nine percent in May 2015 to 15.6 percent in
May
Nigeria’s economy suffered more setback on
Tuesday, June 14, as the nation’s annual
inflation accelerated to a devastating 15.6%
in May.
According to a report by the National Bureau
of Statistics (NBS), Tuesday’s increase is
the highest since February 2010.
The month of May inflation reading comes
just after three monthly increase in quick
succession (February, March, April).
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This is why the annual inflation have
reflected in the higher prices for electricity,
transport and food.
“The increase in rates in May relative to April
reflects an overall increase in general price
level across the economy,” the statistics
office said.
The implication of this is that with an
increase in the nation’s annual inflation,
there is every likelihood that prices of goods
will multiply in the coming months.
The inflation rate has worsened consistently
since President Muhammadu Buhari took
office in May 2015.
Of the 12 months spent so far, inflation has
risen every month but one, moving from nine
percent in May 2015 to 15.6 percent in May.
Nigeria has seen revenues plunge with oil
prices, and pressure on the naira over the
dollar has helped to fuel inflation.
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NAIJ.com recalls that the hoarding of the
dollar had emerged after the Central Bank of
Nigeria Monetary Policy Committee last
month, announced plans to adopt a flexible
exchange rate.
Central Bank Governor Godwin Emefiele
announced on May 24 that the naira’s peg to
the dollar would be abandoned in favour of a
flexible currency regime but has yet to give
details of how the policy will work.
A flexible exchange rate system is a
monetary system that allows the exchange
rate to be determined by supply and
demand.
The implication of this is that with a high
demand for the dollar in Nigeria, there is
every likelihood that the naira will
experience a further decline in the coming
months.