*Typical open market setting in Nigeria
Statistics from the National Bureau of Statistics (NBS) has disclosed that inflation rose highest in Nigeria in March, which is its highest level in 23 months. According to the agency, Nigeria’s annual inflation also rose for a seventh straight month, as border closures and lockdown of the country occasioned by the Coronavirus (COVID-19) pandemic caused prices of items to soar higher.
Consumer Price Index (CPI) report said inflation rose to 12.26 per cent when compared with March 2019, and up from 12.20 per cent, which was the status in February 2020. The closure of land borders in the country in August has been a major driving force for the upward trend of the inflation rate of the country since September 2019. The closure affected the availability of rice, vegetable oil, frozen food and other staple food of Nigerians, causing prices of the commodities to be on the increase.
The report stated that, “The lockdown in Abuja, Lagosn and Ogun States and various major disruptions in normal economic activity in several States since then started in April 2020 and accordingly would not have any major impact on March 2020 Inflation which this report focuses on.” The composite food index rose by 14.98 per cent in March 2020 compared to 14.90 per cent in February 2020. In March 2020, all item inflation on a year-on-year basis was highest in Bauchi, Niger, and Kebbi while Lagos, Abuja, and Kwara recorded the slowest rise.