Nigeria’s inflation rate hits 22.79% as Tinubu reportedly considers N200k minimum wage

Nigeria’s inflation rate has hit 22.79% for the month of June 2023. The numbers witnessed further increase after reaching 22.41% in May, representing a 0.30% per the National Bureau of Statistics (NBS) recently released consumer price index report.

Compared to June 2022 numbers, the present inflation rate represents a 4.19% increase which is utterly disturbing. The data revealed that food inflation led the park as a key influencer in the rise of inflation in June. It accounts for the volume of Nigeria’s inflation. As against its 24.82% in May, it rose to 25.25% in June.

The rise in food inflation on a year-on-year basis is credited to the increases in prices of fat and oil, cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetable, milk, cheese, and eggs. Housing water, electricity, gas, and other fuel followed with 3.81%, while communication at 0.15% was the least on the list.

“On a month-on-month basis, the Core inflation rate was 1.81 % in May 2023. It stood at 1.46% in April 2023, up by 0.35%. The average twelve-month annual inflation rate was 18.33% for the twelve-months ending May 2023; this was 4.50% points higher than the 13.83% recorded in May 2022,”

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Nigeria’s inflation rate has risen for the sixth consecutive month, and now more than ever, the pressure is heavy on the shoulders of the central bank, which is expected to tidy the loopholes when it converges the following week to set interest rates. The meeting scheduled to take place will be the first since newly inaugurated President Bola Tinubu ordered the suspension and immediate arrest of former Central Bank Governor, Godwin Emefiele, in June.

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The World Bank, in its latest Nigeria Development Update report for June 2023, said the loss of purchasing power from Nigeria’s inflation rate which has skyrocketed has increased poverty in the short term, pushing an estimated four million Nigerians into poverty between January – May 2023.

President Tinubu’s few months in office have ushered into Nigerian society some of the boldest reform agendas recorded in the country’s illustrious history. Some of these eye-raising policies include the removal of a popular but costly gasoline subsidy and the flexibility of regulations for foreign exchange trading, an attempt by the president to enhance the redundant economic growth of the country.

But these policies, though with long-term profits, have short-term implications, which have seen the inflation in the country hit ceilings.

Citizens struggle as Nigeria’s inflation rate soars

There has been so much difficulty in Nigerian society since the subsidy on petrol was removed by the President. A liter of petrol sell for as high as N600 at gas station around the country. The price of transportation has tripled. More excruciating is the rumored possible fuel price increase in the coming weeks.

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Amidst all of this, the president also signed student loans into law which has received criticisms as many project that tertiary fee for federal university students in Nigeria is about to go high from N20,000 to N150,000 or more.

There are also reports that the presidency is considering an increase of minimum wage in the country from the current N30,000 to an astounding N200,000. This has also been met with criticism as analysts project that such a move would lead to hyper inflation as the country just doesn’t have enough money to sustain such an outrageous minimum age.

The World Bank estimates based on the National Bureau of Statistics (NBS) data show that 89.8 million Nigerians fell below the poverty line at the start of 2023, with an additional four million making it 93.8 million in May 2023.

Food prices are up by over 150 percent, and transportation costs have almost doubled respectively year-on-year, according to BusinessDay’s market checks. More than ever, the Nigerian government needs to tighten the loopholes that have inflated the country’s poverty rate. The country is presently on an abysmal run, if care is not taken, Nigeria’s inflation rate might skyrocket beyond what was experienced in June.