According to an Analyst, it was derived that without a structural deficiency, it will be difficult for Nigeria to successfully achieve price stability. Nigeria need to deploy other measures to combat inflation condition pushed by policy inconsistency of the past administration.
Some critics also added that not so much has been achieved with the interest rate hike as a tool to combat Nigerian’s inflation despite monetary policy tightening. It is not clear at what point rate adjustment would be effective in curbing inflation from making forget uptrend.
The review of investment banking notes on the consumer price index forecast indicates that analysts are negative on their inflation expectation for the first half of 2024. By consensus, investment firms see Nigeria’s inflation rate climbing further as pressures on food remain.
”There has to be food security, the naira has to stabilise else, an interest rate hike may not be potent not as a matter of theoretical basis but for practical sake”, research analysts at LSintelligence Associates said.
The government closed its border in 2029 to wave off an influx of food and other goods from neighboring countries which leads to persistent rise of inflation. The reaction followed a decision to ban some items from accessing forex from.
The protectionist stance of the former president, Mohammadu Buhari, triggered the border closure following large support for Agricultural produce. It then backfired as local farmers could not produce enough to meet aggregate needs.
Analysts believe that inflation-fighting policies have been inconsistent. Costs, rather than demand have been major drivers of increased consumer price levels. The core push is coming from an unstable exchange rate.
Hot red headline inflation is expected to hit 34% in March, according to a prediction made by Cowry Asset Management Limited following the pass-through effect of the naira devaluation and rising cost of living.
In February, Nigeria inflation became ugly has it soared to a staggering 31.70%, marking a distressing 28-year high with a continued push from negative impact of government policy measure.
According to analysts, this upward trajectory, persisting for fourteen consecutive months, reflects a multifaceted confluence of challenges gripping the nation’s economy.