Nigeria’s inflation rose to a three-year high of 11.4 percent in February, up from 9.6 percent in January, as food prices soared and import costs remained high as the central bank continued its capital controls.
“After increasing at the same pace for two months, the pace of increases of food prices as recorded by the food sub-index increased at faster pace in February,” the National Bureau of Statistics (NBS) said in a report published on Tuesday.
The central bank has held the naira at 197-199 against the dollar since March last year through trading and import restrictions but instead of stemming inflation, prices have soared, with dollar shortages making imports costlier. The currency has also lost more value, as the naira has fallen to around 325 of the black market.
Inflation has been above the central bank’s 6 percent to 9 percent target band since May. In a bid to check this and support the economy, policy makers lowered the benchmark interest rate by 2 percentage points to 11 percent in November. But with inflation rising as oil prices remain low, GDP growth of just over 2 percent (Q4 2015), it will be interesting to see what the rate decision of the central bank’s monetary policy committee would be at its next meeting on March 22.