Cardoso Lists The New Causes of Nigeria’s Inflation

Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has issued a call for fiscal authorities to address emerging inflationary pressures. He noted that while “monetary factors leading to inflation are decreasing, structural issues such as rising food and energy prices continue to propel inflation.”

Cardoso identified new inflationary drivers, including ‘seller inflation’ and significant governmental expenditures on relief supplies for the vulnerable populations. He explained, “In addition, huge purchases by the government for distribution as palliatives to vulnerable citizenry is adding another dimension to the food price inflation, with seasonal factors of food price increases during religious fasting and festive periods, adding price cyclicality.”

He underscored the necessity of “teamwork between monetary and fiscal authorities to tackle the various causes of inflation in Nigeria’s economy.” Cardoso voiced his concern about persistent inflationary pressures, despite recent actions to stabilize the foreign exchange market. “This comes after the rate was raised by 400 basis points to 22.75 percent in the previous meeting,” he noted.

According to the latest data from the National Bureau of Statistics (NBS), Nigeria’s headline inflation climbed to 33.20% year-on-year in March, marking an increase from 31.70% in February. The rise in March was primarily driven by notable increases in food and beverage costs, alongside rising energy and housing expenses.