Nigeria’s Inflation Rate May Be Among World’s Highest In 2022 – World Bank

Nigeria may have one of the highest inflation rates in the world in 2022, the World Bank has disclosed.

Following increasing prices diminishing the welfare of Nigerian households, the international finance institution projected that the West African country might have one of the highest inflation rates globally and the seventh-highest among Sub-Saharan African countries in 2022.

Highlighting the negative effects of inflation on Nigeria, which include pushing eight million Nigerians into poverty, and the possible disruption of consumption, investment and saving decisions, among other consequences, the World Bank also noted that the high inflation hampers the country’s attempt to achieve economic recovery and erodes the purchasing power of most vulnerable households.

Also pointing out that an increase in food prices accounted for about 70 per cent of the annual increase in the rate of inflation, the World Bank also said inflationary pressures were trigged by multiple demand and supply shocks.

The November edition of its Nigeria Development Update read;

“In 2022, Nigeria is expected to have one of the highest inflation rates in the world and the seventh highest in Sub-Saharan Africa.

“If inflation had been closer to the CBN’s goal of nine per cent in 2021, average Nigeria’s consumption would have been 15 per cent higher, and eight million Nigerians would have not fallen into poverty.

“If double-digit inflation persists during 2022-2023, rising prices will distort consumption, investment, and saving decisions of the government, households, and firms, with adverse ramifications for long-term borrowing and lending.

“The parallel rate influences their business decisions, and fluctuations in the parallel rate pass-through to market prices for goods and services. Moreover, monetary policy has not prioritized controlling inflation, and the monetary financing of fiscal deficit undermines the effectiveness of policies to contain demand-side inflationary pressures.”