AGS NEWS – Economists are urging the government to address key challenges such as high energy costs, insecurity, and foreign exchange volatility to combat the rising inflation in the country.

This comes as Nigeria’s inflation rate surged to 31.70% in February, up from 29.90% in January 2024, as reported by the National Bureau of Statistics.

Professor Segun Ajibola, an economist from Caleb University, emphasized that tackling economic fundamentals is crucial to lowering inflation.

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He highlighted that 70% of inflationary pressure stems from the direct costs of consumables, both local and imported.

Teslim Shitta-Bey, Chief Economist at Proshare Nigeria, pointed out that insecurity in farming areas has significantly contributed to inflation by disrupting food production and transportation, leading to higher prices.

He also noted the increased cost of energy as a major factor driving inflation.

Ayodeji Ebo, Managing Director of Afrinvest Securities Limited, highlighted the impact of exchange rate fluctuations on inflation across all sectors and stressed the importance of stabilizing the exchange rate.

The recent reopening of borders brings optimism for a potential reduction in food prices, according to Ebo.

The latest inflation figures mark the 14th consecutive monthly increase and the highest in over 20 years. Prices rose by 1.80% month-on-month in February, with a year-on-year increase of 9.79%.

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The report also identified Kogi, Rivers, Oyo, and Bauchi States as the most affected by food and all items inflation, with notable increases in prices of transportation, housing, medical services, and pharmaceutical products.

The Central Bank of Nigeria (CBN) raised its benchmark interest rate by 400 basis points to 22.75% in February, citing concerns about persistent inflation in the medium term and its potential regulatory impacts if not addressed effectively.