Nigeria inflation rises in May, lifted by food and drug prices

Annual inflation in Nigeria rose for the ninth straight month in May, lifted by higher food and drug prices, the statistics office said on Wednesday, as the new coronavirus pandemic disrupted logistics and economic activities, Reuters reports.

Inflation, a measure of living costs, climbed to 12.4% in May, its highest level in more than two years, from 12.34% the previous month, the National Bureau of Statistics said.

The statistics office said month-on-month increases were recorded in the prices of pharmaceutical products, medical services, transport and associated services.

It said that food inflation, which accounts for the bulk of the inflation basket, climbed to 15.04% in May, compared with 15.03% in April. Food inflation has been in double digits for more than three years.

Nigeria has had more than 17,000 confirmed cases of the coronavirus and 455 deaths. Most cases have been in urban areas, where the brunt of price increases has been felt, especially imported drugs and foodstuffs.

Rising inflation has caused yields on Treasury bills and bonds to turn negative, a major stumbling block for the central bank’s push to attract foreign inflows to support the naira and boost the economy.

Africa’s top oil exporter faces economic hardship from the coronavirus outbreak and sharp falls in crude prices, which have caused a steep decline in growth.

Nigeria’s government expects the economy to contract by as much as 8.9% this year.

Central bank Governor Emefiele has said that the economy could contract in the second and third quarters but recover in the fourth with the fiscal and monetary policy measures put in place by the authorities.